- Primary Subject: Xbox Layoffs and Restructuring
- Key Update: Xbox is implementing significant layoffs and a strategic 'Reset' due to diminishing returns and rising hardware costs.
- Status: Published
- Last Verified: 2026-06-10
- Quick Answer: Upcoming major layoffs at Xbox could be coming, the reasons behind the restructuring, and the potential impact on its gaming strategy, including a shift towards console exclusives.
Xbox seems to be saying and doing all the right things at the moment, but major plans for the Microsoft gaming division include massive layoffs as it continues to restructure its foundation.
Multiple sources are reporting that the number of layoffs could be major. Bloomberg was among the most important sources that reported on the situation, which followed Xbox CEO Asha Sharma's internal letter, which was made public.
Branded as the Xbox Reset, these layoffs would be a response to the consistent diminishing returns the company has had, paired with a turbulent market stability that has made hardware much more expensive to build than before.
In terms of raw numbers, Xbox has lost nearly half a billion dollars during the last fiscal year amid massive expenditures, including over $20 billion in ongoing investment in its portfolio of studios, hardware subsidies, and more.
Things don't seem to be looking bright in the near future, as Asha stated in the letter: "When I joined as CEO in February, the price we paid for console storage components was over 2x as high as we paid last fall. These costs have since doubled again. And as we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier."
The Verge speculates that studio closures could be in order as Xbox moves forward with a more consistent plan to revitalize the brand.
Steps are already in place to try to siphon console users back to Xbox, as Gears of War: E-Day will be a console exclusive, moving away from the previous policies established by Phil Spencer, which focused on bringing software to all platforms, leading to things that seemed impossible, like Halo making its way to PlayStation 5.
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