- Primary Subject: Xbox Brand Restructure (FY27)
- Key Update: Xbox CEO Asha Sharma announced a massive corporate reset, laying off 3,200 employees and spinning off multiple prominent studios.
- Status: Confirmed
- Last Verified: July 6, 2026
- Quick Answer: Xbox is cutting 3,200 workers (20% of its workforce) and letting go of five studios—Double Fine, Compulsion, Ninja Theory, Undead Labs, and Arkane.
Xbox's CEO, Asha Sharma, announced some big changes in the company, but it's not the news people were hoping for.
Recently, Xbox has been plagued with rumors that numerous studios under the company were being shut down, with possible games being cancelled. Well, it seems those rumors are partially true, according to a statement from Sharma herself.
Here's everything we know of the situation.
Xbox CEO Asha Sharma Announces Mass Layoffs and Studio Closures
On July 6, Xbox's CEO Asha Sharma took to X (Twitter) to share a message sent to all XBOX employees, where she details "a significant restructure in XBOX history."
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It was revealed that through fiscal year 2027, approximately 3,200 roles will be eliminated, with 1,600 of these cuts happening today. These cuts will impact employees in Activision Blizzard, King, Bethesda, Mojang, and Xbox Game Studios. However, no publicly announced games were cancelled.
On top of that, Xbox will be letting go of five studios. Compulsion Games and Double Fine will transition to becoming independent studios. Ninja Theory and Undead Labs will be moving to new ownership with funding secured for Senua and State of Decay 3, respectively. Lastly, Arkane is entering consultations regarding strategic operations.
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Management is also being reduced to fix a bloated 40% growth in platform teams. Management layers will be reduced to no more than 5, and where possible, 3. Vendor spend will also be reduced by 50%.
For the first time, Xbox will also be establishing a Chief Operating Officer "with end-to-end P&L responsibility across content, hardware, platform, and services." Helen Chiang will take over this role, and she previously helped build OX Live and lead Mojang and the Minecraft franchise.
In the message, Sharma explained: "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. 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."
We will have to wait and see what the future will be for Arkane Studios, as it is the only studio left in limbo for the moment.
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