Xbox Faces Major Layoffs As They Face Harsh “Realities”
Xbox has seen a lot of changes and updates, and we have even more news to cover about their recent plans. Xbox’s new CEO, Asha Sharma, just posted on X, hinting that Xbox faces major layoffs as they face difficult “realities”.
In the post, Sharma talked about the ways they “need to navigate as we work to reset the XBOX business.”
We just shared with our team the realities we need to navigate as we work to reset the XBOX business. We won't succeed by hiding hard truths, nor will we succeed by doing the same thing and expecting different results. See the note here: https://t.co/IahtBNzwnR
— ASHA (@asha_shar) June 10, 2026
And while the memo that was sent out to employees didn’t mention layoffs, reports indicate that yet more Microsoft employees might lose their jobs in the coming weeks. Sources have even confirmed with Bloomberg that layoffs are actually on the horizon as Sharma works to rework the gaming business.
The memo in question was sent yesterday, June 10th, and covered the plan for the next 100 days. It covered the good news about how Xbox was doing after the initial 100 days, but warned that Xbox was “not in a healthy spot,” and suggested that a restructuring was imminent.
One of the biggest things that was mentioned was Xbox’s earnings situation, “will end this fiscal year at about a 3% accountability margin…. our annual revenue has declined nearly half a billion during that time.”
“Going forward, this cannot continue.”
The memo also touched on the hardware crisis, which has ultimately raised the prices of consoles. “While the entire industry is facing a component crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half-decade.”
“We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix.”
Sharma continued, saying that Xbox has over extended themselves with buying game studios over the last decade, and admitted that they haven’t “adequately funded” the studios to “compete and win.”
“At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP is critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years.”
Sharma continued, bluntly saying that their “current platform infrastructure is not built for the battle ahead. Our systems are overly complex, spanning hundreds of dependencies, which hinders our ability to move fast.”
From the sounds of the memo alone, it definitely sounds like layoffs are in the future, which is an unfortunate situation, but surely fans are excited to see that Xbox is truly trying to get back to Xbox, just like Sharma plans.
