Sources: Microsoft's Xbox division is planning major layoffs next month and significant budget cuts for marketing and some other areas

Asha Sharma's first major cuts will arrive in July — Microsoft Corp.'s Xbox division is planning major job cuts next month as new Chief Executive …

Bloomberg 2026-06-11 Jason Schreier

Context & Ripple Effects

The reported July cuts would follow several prior Xbox restructuring rounds, including studio closures in 2024 and another substantial layoff round anticipated in 2025. The division is also entering what its leadership has described as an “Xbox reset,” after revenue reportedly declined over the preceding five years.

At the same time, Xbox has been widening cloud-gaming access beyond its highest-priced subscription tier and testing access to more PC games. That makes the planned reductions relevant not just as a workforce event, but as a potential reprioritization of how Xbox funds distribution, marketing, and platform expansion.

First-order effects

Xbox employees face another planned round of job losses, while marketing and other operating teams would have less budget to execute launches and customer-acquisition campaigns.
Asha Sharma’s new leadership team would immediately have to translate the stated reset into narrower spending priorities and a smaller operating footprint.

Second-order effects

Lower marketing spend could put more pressure on Xbox’s cloud-gaming and subscription expansion to rely on product access, catalog value, and existing Microsoft channels rather than paid promotion.
Teams, studios, and external partners dependent on Xbox launch support may face tighter prioritization as the division concentrates resources on fewer initiatives.

Third-order effects

If repeated cuts and budget resets continue, Xbox may evolve toward a more capital-disciplined platform and services organization, with greater scrutiny of the cost and return of game, cloud, and marketing investments.
The pattern also raises the likelihood that large game-platform operators treat subscription and cloud distribution as long-term efficiency levers—but whether they can offset weaker traditional division economics remains unresolved in the coverage.

The trend: This is one data point in the broader shift of major game businesses toward leaner, service-led operating models while they expand cloud and subscription access.

Discussion

XBOX Wire XBOX Wire on x
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Pure Xbox Fraser Gilbert on x
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@layoffai @layoffai on x
XBOX LAYOFFS COMING - Bloomberg New CEO Asha Sharma calls it a “reset.” That means major layoffs, expected right after Microsoft's June 30 fiscal year-end. Microsoft already had a voluntary retirement program back in April, offering buyouts to roughly 8,750 US employees. [image]
Jason Schreier Jason Schreier on linkedin
BREAKING: Xbox is planning major layoffs next month, Bloomberg has learned, as new CEO Asha Sharma confronts a bleak picture and plans what she calls a “reset” of the business …
@mackeza Keza MacDonald on bluesky
Sunday: fly a bunch of fans and influencers and press out to LA and show off a bunch of promising stuff in a big fancy showcase. Wednesday: announce forthcoming layoffs and restructuring across all the game studios you recently spent billions acquiring. — news.xbox.com/en-us/2…
@gematsu.com @gematsu.com on bluesky
Xbox CEO Asha Sharma and executive vice president Matt Booty publish staff memo ‘Next 100 Days: Xbox Reset’ — Xbox CEO Asha Sharma and Xbox executive vice president and chief content officer Matt Booty have published a memo sent to Xbox staff today, discussing the company's fir…
@stephentotilo Stephen Totilo on bluesky
The email also refers to Microsoft as being “over extended” after expanding their game studios operations — They've published it now, so you can read it yourself: news.xbox.com/en-us/2026/0...
@knoebel @knoebel on bluesky
~ Asha and Matt ~ have published an... idk it's sounds like a manifesto... about the next 100 days for Xbox or “XBOX Reset”. — news.xbox.com/en-us/2026/0... [image]
@wario64 @wario64 on bluesky
Matthew Ball (Xbox chief strategy officer) said that Xbox Game Pass lost “millions” of subscribers in the period of a few months after the 50% price hike announced in Oct 2025 www.gamespot.com/articles/is- ... [image]
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@wario64 @wario64 on x
Bloomberg: Xbox Plans Significant Layoffs as It Transforms Under New CEO - first major cuts in July ‘Xbox is also planning to significantly slash budgets for marketing and some other areas of the business’ https://www.bloomberg.com/... [image]
@shinobi602 @shinobi602 on x
Xbox plans ‘major reset’ at the company going forward as the business falls under strain: ▪️Excluding Activision, Xbox has lost roughly half a billion dollars in revenue per year over the past five years ▪️Will end this fiscal year at ~3% profitability, down year-over-year [image…
@idlesloth84_ @idlesloth84_ on x
Microsoft published the letter “Next 100 Days: XBOX Reset” that was sent to Xbox employees via: XBOX Wire [image]
@nib95_ @nib95_ on x
#Xbox CEO Asha Sharma and XGS head Matt Booty posted an update on the state of Xbox and platform reset plans. Some choice titbits: 1. Margins. Xbox had just 3% accountability margin (similar to operating income or profit) this last fiscal year. For context, PlayStation's [image]
@wario64 @wario64 on bluesky
The Verge on Xbox layoffs: “Sources suggest the cuts could even involve a studio closure, or changes to the Xbox studio lineup” www.theverge.com/games/948142... [image]
@jaypeters.net Jay Peters on bluesky
Rough to go from a celebratory video game show on Sunday to an impending “Xbox reset” today — www.theverge.com/games/948142...
@tomwarren.co.uk Tom Warren on bluesky
BREAKING: Xbox warns of a “reset” as it prepares for layoffs. Sources tell me there are major Xbox layoffs coming next month, and the cuts may even involve a studio closure. Details 👇 www.theverge.com/games/948142...
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Breaking down Matt Booty's statement on TES VI
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