Microsoft Xbox to Cut 3,200 Jobs as CEO Asha Sharma Announces Major Restructuring
Microsoft's Xbox division is set to eliminate 3,200 jobs and restructure four of its game studios in what CEO Asha Sharma has described as “the most significant restructure in Xbox history.”
Microsoft's Xbox division will cut 3,200 jobs and restructure four game studios as CEO Asha Sharma outlines a major reset.
The restructuring was announced in a staff memo on Monday titled “resetting Xbox.” According to Sharma, approximately 1,600 employees will be laid off immediately, while the remaining job cuts will take place over the next 12 months.
Getty Images
“I recognize that a year-long restructuring creates additional challenges,” Sharma writes. “Unfortunately, it is not possible to make all the necessary changes in a single day, and I wanted to be direct about the scale.”
As part of the changes, Compulsion Games and Double Fine Productions will be spun out to their management teams to operate independently. Meanwhile, Ninja Theory and Undead Labs have secured funding and will continue operating under new ownership.
Sharma acknowledged the challenges facing the business, stating that “our business today is not healthy,” while pointing to lower margins and slower-than-expected growth despite increased staffing.
“And now the industry is facing the most severe hardware crisis in its history. We must reset Xbox,” she added.
The CEO also highlighted the company's management structure as an obstacle to efficiency, revealing that some decisions currently require approval through 14 layers of management.
“That complexity has slowed decisions, blurred accountability, and made it harder to deliver for players. As we reset Xbox, we will simplify,” she wrote. “We will reduce management layers to no more than 5, and where possible, 3.”
In addition, Sharma announced that Helen Chiang has been appointed as the Xbox division's first Chief Operating Officer, with profit-and-loss responsibility across the division.
Despite the sweeping changes, Sharma emphasized that the restructuring is intended to strengthen Xbox's future.
“These changes are about a bigger future for Xbox, not a smaller one. The next decade of gaming will be larger, more global, and more creative than anything we’ve seen before,” Sharma writes. “This year, we’ll invest as much in XBOX as we ever have, but we’ll invest with greater focus, greater discipline, and greater clarity, all in service of making XBOX where the world plays and creates.”
