Xbox plans layoffs, even after Microsoft CEO said company is ‘long on gaming’

In July, Xbox may be the next company hit with major changes to its workforce. According to Bloomberg, people familiar with Xbox’s strategy said that the company is “planning major job cuts next month,” although the scale and details of the cuts are still unclear. Along with staff cuts, Xbox is also planning “significant” budget cuts “for marketing and some other areas of the business.” Fast Company reached out to Xbox for comment regarding details about the layoffs and budget cuts. This would mark Asha Sharma’s first round of layoffs since she joined the company as CEO in February. Since the former Instacart COO and Microsoft CoreAI president took on the role of CEO, she has made some major changes, like removing Microsoft’s Copilot AI from gaming consoles and lowering prices of Xbox Game Pass. (Enthusiastic Xbox devotees created memes of Sharma depicted as Jesus Christ after these changes.) Sharma has been candid about Xbox’s struggles. During a panel at the Bloomberg Tech conference earlier this month, she spoke about the company’s challenges and plans for “resetting the business,” which was “not in a healthy spot.” “The gaming industry is going through a hard time,” Sharma said, attributing some of the struggle to AI. “With AI, memory and storage costs are going up, 2.75 times rather than 50% down. Just in my first 100 days, it’s up 50% and I think it will continue to go up. The biggest challenge and opportunity is: how do you make affordable products during that time?” Just today, the head of Xbox Game Studios Craig Duncan stepped down from his role after joining the team in November 2024. The company’s chief of staff Louise O’Connor will also be departing. Last week, Sharma outlined the challenges facing the company and her priorities to “reset for a stronger Xbox” in a blog post. “We will end this fiscal year at about a 3% accountability margin, down year-over-year,” Sharma wrote. “Excluding Activision Blizzard King, over the past five years, we have spent ov