Last month, there were murmurs that “major job cuts” were coming for Xbox
Now, Microsoft is cutting 4,800 roles, with 1,600 impacting its Xbox division today. In an email to employees, Xbox CEO Asha Sharma called it “the most significant restructuring in Xbox history.”
In the email, Sharma said she “made the difficult decision” to cut 3,200 roles—including the 1,600 cut today—by the end of the financial year in July 2027. The other 1,600 cuts are in addition to the 4,800 employees leaving Microsoft immediately
As part of the restructuring, Sharma said Xbox will work through a “flatter organization” and reduce management layers “to no more than five, and where possible, three.” Sharma said that some of the company’s work passes through 14 management layers. The company makeup will include “individual contributors focused on building,” player-coaches “who remain deeply involved in the work while developing their teams,” and “directly responsible individuals (DRIs)” who are the decision-makers.
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“We will streamline how we work across our tools, with a cleaner code base, shared services, and 50% reduced vendor spend,” Sharma said
Aworkforce over the fiscal year, and that the restructuring is “not about AI automation.” They also said impacted employees will receive severance, healthcare continuation where applicable, career transition support, and other benefits
In a memo to employees, Microsoft EVP and chief people officer Amy Coleman said the “changes mostly fall within our Commercial and Xbox organizations.” Coleman pointed to broader industry changes as part of the reason the company needs to “adjust retest impact for our customers.”
