Xbox has started its biggest restructuring, cutting around 3,200 roles through fiscal year 2027. CEO Asha Sharma said the business faced weak margins, high costs and a hardware crisis. The changes will affect Activision, Bethesda, Blizzard and other teams, while four studios will move under new ownership.
Xbox has begun what CEO Asha Sharma called the most significant restructuring in the division's history, cutting its workforce by approximately 3,200 roles through fiscal year 2027. Of these, 1,600 role eliminations took effect immediately, with the remaining cuts to follow over the course of the year.
What Sharma said in the memo
In a memo to Xbox employees, Sharma said the company's business was 'not healthy', pointing to operating margins running three to ten times lower than comparable platform and publishing businesses. She said Xbox entered the current console generation with a smaller install base and a higher cost structure than rivals, and that bets on Game Pass, multi-platform expansion and a broader content portfolio had not grown at the pace expected.
"I know this is painful," Sharma wrote, acknowledging that the changes would affect people who had built their careers at Xbox, whether they joined through acquisitions, direct recruitment, or a shared passion for the industry.
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