Big shake up for Xbox – 3,200 jobs to be cut as part of largest restructure in the company’s history
Key Points
- Xbox will cut 3,200 roles through FY27, release four studios to new ownership, and appoint Helen Chiang as its first COO in the largest restructure in company history.
- Xbox Chief Executive Officer Asha Sharma announced the changes in an email to all employees on Monday (6 July), confirming approximately 1,600 role eliminations with immediate effect.
- Sharma said the year-long restructure could not be completed in a single day and described the scale as the most significant in Xbox history.
- Sharma said the business was not healthy, operating at margins 3–10x lower than comparable platform and publishing businesses.
Xbox will cut approximately 3,200 roles through FY27 and release four studios to new ownership as part of the largest restructure in the company’s history.
Xbox Chief Executive Officer Asha Sharma announced the changes in an email to all employees on Monday (6 July), confirming approximately 1,600 role eliminations with immediate effect.
Sharma said the year-long restructure could not be completed in a single day and described the scale as the most significant in Xbox history.
Sharma said the business was not healthy, operating at margins 3–10x lower than comparable platform and publishing businesses. She said Xbox entered Gen 9 with a smaller install base and a higher cost structure, and that bets on Game Pass, multi-platform releases, and a broader content portfolio did not grow at the pace expected.
Sharma also pointed to what she called the most severe hardware crisis in the industry’s history.
The restructure will see Compulsion Games and Double Fine Productions return to management and transition to independent studios with their IP, catalogues, and runway for their next games.
Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3. In France, Arkane’s management has begun required consultation with its Works Council to review potential strategic options.
Sharma said Xbox lost 64 cents for every dollar invested in its studio portfolio in a typical year, and that it was neither possible nor desirable to own every great independent studio.
Further reductions will vary in size across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios, though Sharma confirmed no publicly announced first-party games or projects will be cancelled.
Mojang and King, the company’s largest studios by monthly active players, will now report directly to Sharma.
On the platform side, Sharma said work in some parts of the company passed through as many as 14 layers of management, and that platform teams were 40% larger than at the start of the generation despite declining player numbers and playtime.
Xbox will reduce management layers to no more than five, and where possible three, alongside a 50% reduction in vendor spend.
Xbox has also established a Chief Operating Officer role for the first time, with end-to-end P&L responsibility across content, hardware, platform, and services.
Helen Chiang, who has spent nearly two decades at the company across Xbox Live and Mojang, has been promoted to the position and will report to Sharma. Dave McCarthy will retire after 17 years with the company.
Sharma said Xbox will invest as much in the business this year as it ever has, and that the company will return to growth in 2027.
