Updated June 11, 2026, at 00:36 a.m. / 7:36 p.m. E.T. / 4:36 p.m. PT
According to The Verge, the layoffs at XBOX could lead to “the closure of a studio, or changes to the list of Xbox studios”.
Original article
The excitement surrounding the Xbox Games Showcase didn’t last very long. Amid a strategic reevaluation, Microsoft’s gaming division is set to lay off a portion of its workforce.
In an article published on [Bloomberg](https://www.bloomberg.com/news/articles/2026-06-10/xbox-plans-significant-layoffs-as-it-transforms-under-new-ceo-asha-sharma?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9. eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc4MTEyNDkwOCwiZXhwIjoxNzgxNzI5NzA4LCJhcnRpY2xlSWQiOiJUR0ZPUU5LSVAz UlYwMCIsImJjb25uZWN0SWQiOiJCMUVBQkI5NjQ2QUM0REZFQTJBRkI4MjI1MzgyQTJFQSJ9.cjHY4m0BuOULFpdYUKt2jmNBt-PDLWE6Vy-JsYLWvwI), journalist Jason Schreier revealed that Xbox plans to carry out significant layoffs as early as July. The number of employees to be laid off remains unknown. Microsoft will wait until after the close of its fiscal year on June 30 to carry out this downsizing. The company’s marketing budgets will be significantly reduced, and this will also be the case in other divisions.
XBOX president Asha Sharma stated in a letter to employees that the division’s “Accountability Margin” had fallen to 3 %. Schreier explains that this is a metric used by Microsoft to reflect profit margin.
“Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue.”
What’s more, the president of Xbox stated that she plans to rethink the catalog and platform infrastructure in the coming weeks and months. She also noted that exclusives and new IPs are essential to success.
“In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content. We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win. At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years.”
In short, this change in direction will impact Xbox as a whole, leading to massive layoffs across the entire company. July is shaping up to be a bleak month for the video game industry.
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Author: 360 Technology Group
