Xbox’s layoffs aren’t finished. According to Fortune, CEO Asha Sharma is planning the next rounds of job cuts for October, November and January. So far, 1,868 roles have gone out of a planned 3,200.
What Fortune reported
In its profile of Sharma, published on 20th October, Fortune says she “has cut 1,868 people as part of plans to reduce headcount by 3,200 during the next year”. She has also “slashed several management layers”. Citing people familiar with the plans, it reports the next rounds are planned for “this month, November, and January”, though “layoff plans can change”.
Fortune says staging the cuts in waves has left some staff demoralised, “sitting under a yearlong cloud” while they wait to hear whether their roles will go. It also found at least one employee who was laid off and then given the chance to stay. Sharma acknowledged the tough decisions and told Fortune she values people and doesn’t intend to be transactional.
How we got here
None of this comes out of nowhere. In her “Resetting Xbox” memo on 6th July, Sharma announced a reduction of “approximately 3,200 throughout FY27”. That included about 1,600 role eliminations that day, plus changes for four studios: Compulsion Games, Double Fine, Ninja Theory and Undead Labs. She wrote that “our business today is not healthy”, with margins “3-10x lower than comparable platform and publishing businesses”. She also promised to cut management layers to no more than five, and three where possible. Business Insider covered the cuts at the time. TechTimes reports a further 268 roles went in September, which matches Fortune’s 1,868 total.
Fortune puts Xbox’s profit margin at around 3% on a Microsoft measure, which Sharma had already flagged in a June memo. July’s memo said no publicly announced first-party games were being cancelled as part of the reductions.
What’s next
Microsoft reports its quarterly earnings this month, and Fortune calls that the next test of Sharma’s plan. Fortune’s wider profile also covers the next Xbox’s projected price and a 2027 handheld, a Game Pass overhaul and Sharma’s 1 billion daily players goal.
