Asha Sharma Announced More Layoffs, in Addition to 4 Studios Leaving for New Management
Xbox isn’t finished with its reset. While the new Xbox CEO made powerful and positive moves at the beginning, her recent decisions have been much more negative. Yesterday, July 6, Asha Sharma announced more layoffs, including 4 studios leaving for new management.
The new restructuring has been incredibly jarring, and it hasn’t slowed down, as it’s being labeled as the most significant and biggest reset in XBox’s history. Apparently, the company is planning on laying off 3,200, with 1,600 being yesterday, “in addition, four studios will leave XBOX to new management,” according to a social media post by Sharma.
This is an important email I sent today to all employees at XBOX:
— ASHA (@asha_shar) July 6, 2026
Team,
We are beginning the most significant restructure in XBOX history. After careful consideration, I've made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include…
The internal memo shared with employees was also published on X, as Sharma does her best to stay as transparent as possible.
“I recognize that a year-long restructuring creates additional challenges. Unfortunately, it is not possible to make all the necessary changes in a single day, and I wanted to be direct about the scale.”
“I know this is painful.”
In June, Sharma made her intentions clear about where she wants the company to head. At the beginning of the month, Sharma posted that Xbox was facing major layoffs as they dealt with difficult “realities.” She admitted that Xbox had over extended themselves over the years, buying game studios but not being able to fund them properly.
In her social media post, she continues the same trend, saying that the business “today is not healthy.”
“We are operating at margins that are 3-10x lower than comparable platform and publishing businesses,” she continues. She then goes on to talk about her plans for the future, starting with the studios. The four affected studios are Compulsion Games, Double Fine, Ninja Theory, and Undead Labs, all of which were bought within the last eight years.
“Compulsion Games and Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and runway for their next games. Ninja Theory and Undead Labs have entered into a team to join new ownership with funding to complete and grow Senua and State of Decay 3. In France, Arkane’s management is beginning required consultation with its Works Council to review potential strategic options.”
Sharma continues, turning her focus on the platform itself, boasting about simplicity rather than being bigger, saying, “We will streamline how we work across our tools, with a cleaner code base, shared services, and 50% reduced vendor spend.”
Along with that, she’s resetting how Xbox operates. “As XBOX grew our headcount, we became more fragmented. Teams, studios, and functions often operate independently, and it became harder to work towards a shared goal, make the right tradeoffs, and get things done.”
To do this, they’ve established a “Chief Operating Officer with end-to-end P&L responsibility across content, hardware, platform, and services. Helen Chiang has been promoted to this role and will report directly to me.”
From the comments on the post, many people are excited about the future of Xbox, even with the difficult news of layoffs and the removal of studios from their roster.
