In July this year, Asha Sharman announced plans to eliminate approximately 3,200 jobs during Microsoft’s fiscal 2027, including around 1,600 positions that were cut immediately. A further round of layoffs affecting roughly 260 employees followed in September. Microsoft has not publicly confirmed the latest reported plans or disclosed how many employees could be affected.
Sharma is planning some more job cuts this month, followed by some additional rounds in November and January, extending a shake-up that has already resulted in thousands of layoffs across Microsoft’s gaming operations, according to a report by Fortune. Microsoft’s Xbox division is reportedly preparing for three additional rounds of layoffs over the coming months as CEO Asha Sharma pushed ahead with a sweeping restructuring aimed at improving the gaming business’ financial performance.
Sharma, 38, took over in February from longtime Xbox head Phil Spencer. Fortune describes Xbox as a roughly $21 billion business with profit margins of about 3 percent, a fraction of what rivals earn and far below what Microsoft expects of its major units. Current Xbox consoles have sold only a little over a third as many units as the PlayStation 5, according to third-party estimates, and memory chip shortages are pushing up hardware costs.
Sharma told Fortune in July that Xbox had grown by making many bets and lost focus on its core business, saying the company “spread ourselves too thin.”
She had no video game industry experience, having previously led product work on Microsoft’s AI Foundry platform.