Microsoft’s Xbox gaming division is reportedly preparing to cut hundreds of jobs this week as part of an ongoing restructuring under CEO Asha Sharma. The Information reported the planned reductions, citing a person briefed on the company’s plans. Microsoft had not formally confirmed the latest cuts at the time of reporting.
The reported workforce reduction would come after a major restructuring announced by Sharma in July. In a message to Xbox employees, she said the company planned to reduce its workforce by approximately 3,200 roles during fiscal 2027, including about 1,600 immediate job eliminations. The restructuring also involved changes to the ownership of four studios.
Xbox is also reportedly preparing to consolidate several game studios. The latest changes are part of Sharma’s broader effort to simplify the gaming business, reduce organisational complexity and focus investment on major franchises.
In July, Sharma said Xbox had expanded its studio portfolio significantly but was facing a higher cost structure and weaker growth than expected. She announced plans to reduce management layers, streamline operations and shift resources towards higher-priority projects.
The restructuring comes as Xbox seeks to return to growth by the end of fiscal 2027, which concludes in June 2027. Sharma has said the business needs to better align its investments with what players value.
The latest reported layoffs therefore appear to be part of a wider restructuring already underway rather than an entirely separate workforce reduction. The exact number of additional employees affected and which studios will be consolidated remain unclear.