Xbox Reportedly Weighing Significant Layoffs Under New CEO Asha Sharma

Xbox is reportedly considering another round of significant layoffs as new CEO Asha Sharma looks to reset parts of the business and cut costs. According to Bloomberg, the cuts have not been formally announced, but could come as Microsoft closes out its fiscal year at the end of June.

The report says Xbox may sharply reduce budgets in marketing and other areas. It’s not yet clear how many employees could be affected. Xbox declined to comment to Bloomberg.

The news lands alongside Sharma’s first 100 days as CEO. In a post on Xbox Wire, Sharma and Matt Booty said the company needs to “reset the business” while dealing with declining hardware revenue, production cost pressures, a complicated platform infrastructure, and the demands of feeding multiple content strategies.

In the Xbox post, Sharma and Booty also said the company has become “too reliant on vendors” to operate its systems and needs to become more self-reliant on the engineering side. They pointed to rebuilding Xbox’s tech stack and looking at capabilities across hardware, PC, mobile, and streaming.

Bloomberg’s report follows a rough stretch for Xbox hardware, including a reported 33% year-over-year drop in hardware revenue during Q3. Sharma has also recently argued that the industry should focus more on reducing console production costs instead of chasing only high-end hardware.

Xbox has been adjusting other parts of its strategy too, including bringing back more platform exclusives on a case-by-case basis and cutting Game Pass pricing after subscriber feedback. For now, though, the biggest unanswered question is whether these reported cuts happen, and which teams take the hit.