Overview
- Xbox announced on July 6 that it will eliminate roughly 3,200 roles in its gaming division as part of a multi‑phase reset, with about 1,600 positions cut immediately and about 1,600 to be phased out later.
- The company said four studios will be spun off and a fifth is under review, and WARN filings confirm significant studio‑level layoffs at ZeniMax, id Software, Obsidian and others.
- CEO Asha Sharma framed the move as a necessary business reset, saying Xbox margins are far lower than peers and that rising component costs threaten planned hardware projects.
- The timing has drawn political and labor backlash because U.S. visa data show thousands of H‑1B approvals for Microsoft this year while domestic cuts proceed.
- The restructuring follows heavy spending on content and acquisitions and signals a shift of capital and headcount away from experimental gaming projects toward Microsoft’s AI and cloud priorities.