Xbox Division Set for Major Layoffs Next Month
*Microsoft plans cuts at Xbox after revenue fell by nearly half a billion dollars over five years despite heavy spending.*
Microsoft will conduct major layoffs at its Xbox division sometime after June 30. The timing follows the close of the company's fiscal year and comes weeks after new Xbox CEO Asha Sharma told staff the business "isn't particularly healthy."
Reported Details
Sources speaking to Bloomberg told Kotaku and GameSpot that the reductions will affect the Xbox organization directly. Sharma sent an email to employees on June 10 that placed the cuts in the context of revenue performance. Annual revenue has declined by nearly half a billion dollars across the past five years even though Microsoft spent more than $20 million on the brand, excluding Activision Blizzard King.
Sharma wrote that the company expanded its studio system to build content for subscription, streaming, and hardware strategies. The expansion left the division overextended while executing on changing plans.
Prior State
The Xbox group had grown its internal studios and content commitments over several years. Sharma's note indicates those commitments outpaced the revenue the division was able to generate. No official headcount figures or specific team targets have been released.
Why It Matters
The layoffs signal that Microsoft intends to shrink costs inside Xbox rather than continue funding an oversized studio footprint. Employees now face the practical task of executing on fewer projects with fewer people once the fiscal year closes. The move also shows that the new leadership views the current structure as unsustainable after years of investment that failed to reverse the revenue trend.
---
Sources:
No comments yet