Report: Xbox plans major layoffs as new CEO pushes restructuring effort

• Xbox is planning major layoffs expected after June 30th.
• Marketing and other business budgets are also set for significant reductions.
• The exact scale of the layoffs has not been disclosed.
• Xbox has faced declining console sales and a shortage of blockbuster releases.

Microsoft's Xbox division is preparing for significant layoffs and budget reductions as CEO Asha Sharma moves to overhaul the gaming business.

As reported by Bloomberg, the job cuts could be expected shortly after the close of Microsoft's fiscal year on June 30th. The exact number of affected employees has not been disclosed. 

The layoffs are set to become the first major restructuring initiative under Sharma, who assumed leadership of Xbox in February. In addition to workforce reductions, Xbox is reportedly planning substantial cuts to marketing spending and other areas of the business.

Strategic moves

The restructuring comes as Xbox faces pressure from weakening console sales and a shortage of major game releases. Microsoft's broader strategy around subscriptions and cloud gaming has also struggled to offset those challenges.

In an internal email to staff, Sharma said that Xbox's accountability margin had fallen to 3%. She also shared that the company had spent more than $20 billion on content, platforms and hardware subsidies over the past five years, while annual revenue declined by nearly half a billion during the same period.

Sharma reportedly said Xbox would need to rebuild its platform infrastructure and reassess its portfolio in the coming months.

In April, Microsoft introduced some of its first major strategic changes under Sharma, lowering Game Pass prices and ending day-one releases of future Call of Duty titles on the subscription service.