Overview
- Xbox CEO Asha Sharma confirmed Monday that the division will eliminate about 3,200 roles through fiscal 2027, with roughly 1,600 positions cut immediately as the first wave of layoffs.
- Four studios are leaving Xbox’s first‑party roster: Compulsion Games and Double Fine will return to independent ownership, while Ninja Theory and Undead Labs have deals to move to new owners; Arkane Lyon is entering a mandatory works‑council consultation in France.
- Leadership says the move responds to thin operating margins and rising component costs that threaten next‑gen hardware economics, and that the division lost about $0.64 for every dollar invested in a typical year.
- Helen Chiang has been promoted to a new chief operating officer role to centralize P&L and flatten management layers, longtime executive Dave McCarthy is retiring, and Microsoft says eliminated roles are not being replaced by AI.
- The cuts sit inside a wider Microsoft reduction of about 4,800 jobs and follow years of heavy studio spending and acquisitions, with the company pledging to keep all publicly announced first‑party projects and to refocus investment on higher‑priority franchises while seeking to return Xbox to growth in 2027.