Once again, XBOX is planning to carry out another round of mass layoffs across their various studios and divisions. This is according to a new report from Bloomberg, and anybody capable of seeing the writing on the walls since Asha Sharma took over as head of XBOX.
Bloomberg, citing multiple anonymous sources, say that layoffs will arrive after the end of Microsoft's current fiscal year. The end of the fiscal year is June 30th for Microsoft. These layoffs will begin to hit in early July alongside several additional cuts to marketing and other areas.
With these layoffs and cuts still being at least three weeks out, it's impossible to say just yet how many jobs will be impacted.
This report from Bloomberg comes on the same day that XBOX CEO Asha Sharma took a look back on her first 100 days as head of XBOX. Sharma, joined by XBOX Game Studios head Matt Booty, talked about the few success they've achieved and several of the challenges that they're facing. Those challenges are mostly focused on financial uncertainty. The two note that XBOX has spent $20 billion on content investments over the past five years. This does not include the $69 billion purchase of Activision Blizzard King, which was finalized in late 2023.
That $20 billion spend was also paired with a reduction in annual revenue by "nearly half a billion" over the same period of time. The XBOX division has also dropped to a borderline terrible 3% profit margin. Sharma and and Booty flatly said that "this cannot continue."
Continuing, Sharma and Booty briefly talked about the ongoing "hardware component crisis." They note that when Sharma took over as CEO in February, XBOX was already paying over twice as much for storage than they paid last fall. In the 100 days since, those prices "have since doubled again." They expect "another significant increase" going into the 2027 holiday season. This would bring storage costs to about five times what they were just two years ago, with similar increases hitting XBOX memory components.
Strangely, Sharma says that they believe XBOX has "been impacted more greatly" than many of their peers due to choices made over the past half decade. She does not elaborate on what those choices are exactly. She does say that they are "currently unable to make as many consoles as players want to buy." I'm sure those at XBOX, a Microsoft owned company, will get to the bottom of why they are having just such a gosh darned difficult time sourcing components for their consumer-focused toys. Maybe there's someone or something they could ask to help them sort this whole mess out.
XBOX also recently shared that Game Pass got hit extremely hard. Allegedly the subscription service lost "millions of subscribers" following the price increase in October 2025. That could be why the price of Game Pass went back down slightly this past April. The studio has also been busy making last-minute decisions on platform exclusive titles. Both Gears of War: E-Day and Clockwork Revolution will be exclusive to XBOX and PC platforms. This is despite Gears of War: E-Day being given PEGI ratings for both XBOX Series X|S and PlayStation 5. This change for Gears of War: E-Day seemed to be so last minute that even an official XBOX YouTube video still had the PlayStation 5 logo shown for the title, 24 hours after it was announced as XBOX exclusive.
The XBOX division at Microsoft is no stranger to mass layoffs, as sad as that is for me to report. The company had mass layoffs hit almost exactly one year ago. In July 2025, Microsoft cut over 9,100 jobs with the XBOX side being hit particularly hard. XBOX owned studios such as Rare, ZeniMax Online Studios, King, Undead Labs, and Turn 10 Studios were all hit hard with layoffs. The reboot of Perfect Dark was cancelled and the studio working on it, The Initiative, was shut down.
Sharma concludes the letter by saying that the realities of XBOX's future "will be surprising and even frustrating to discover," and they "won't succeed by hiding hard truths." We'll have more information to share on the impending layoffs as they happen.
They don't make sense.