Microsoft’s Xbox division is reportedly gearing up for another round of layoffs, with CEO Ashar Khan Sharma planning significant workforce reductions across three more phases. This comes as part of an ongoing restructuring effort within the gaming giant.
Ongoing Restructuring and Layoffs
According to a report by Fortune on October 20th, Sharma intends to implement further cuts in October, November, and again in January of the coming year. This follows a major announcement in July where Sharma outlined a plan to eliminate 3,200 jobs within Microsoft’s 2027 fiscal year. Of those, 1,600 employees departed in July itself. More recently, in September, approximately 260 additional employees were laid off.
Studio Restructuring and Future Speculation
The restructuring extends beyond staffing numbers, impacting the internal studio landscape. Sharma has pushed for the independent operation of two game studios: Double Fine and Compulsion Games. However, the future looks uncertain for Ninja Theory, the studio behind the Senua series, which may face closure.
These internal changes have fueled speculation in the industry about the potential for Xbox to be split up or even sold. Addressing these rumors, Judson Althoff, CEO of Microsoft’s Business division, attempted to quell the speculation. He stated, “Asha is one of Microsoft’s finest leaders. If we intended to sell Xbox, we would not have her running this business.” Althoff added that while speculation is inevitable, “time will tell.”
Sharma herself recently issued a direct clarification to The New York Times, unequivocally stating, “Xbox is not for sale.” This direct rebuttal aims to provide clarity amidst the ongoing rumors and internal adjustments.
Future Hardware and Console Plans
Despite the internal turmoil and workforce reductions, Microsoft appears to be looking towards the future of its gaming hardware. Reports indicate plans for a new generation of handheld gaming devices set to launch in 2027. Furthermore, the next generation of Xbox consoles, codenamed Project Helix, is reportedly scheduled for release in 2028.
The series of layoffs and studio reorganizations signal a period of significant change for Microsoft’s Xbox division. While the company emphasizes its commitment to the Xbox brand and future hardware, the ongoing adjustments raise questions about the long-term structure and direction of its gaming operations.
