Microsoft’s Major Overhaul: Key Updates on Upcoming Layoffs and Studio Closures at Xbox

Xbox is undergoing significant transformations once again. On June 10th, shortly after Asha Sharma stepped into the CEO role, she and newly appointed chief content officer Matt Booty communicated to the team about an impending “Xbox reset.” They highlighted that the company is grappling with serious challenges, such as a 3 percent “accountability margin,” soaring component costs for consoles due to shortages in memory and storage, and an “overextended” studio system.

On the same day, reports emerged indicating that the Xbox division is preparing for layoffs in July. These cuts, anticipated to be revealed on July 6th, may involve studio closures or spinoffs. A report noted that Microsoft is considering shutting down at least five studios and possibly canceling titles like Blade.

Under Sharma’s guidance, Xbox has already initiated several significant changes, including planned price increases for Xbox consoles, a reduction in Game Pass prices while excluding new Call of Duty titles, rebranding Xbox to XBOX, and securing exclusivity for both Gears of War: E-Day and Clockwork Revolution on Xbox consoles.