- A new email sent to Xbox employees has revealed that the company will be laying off 3,200 members of its workforce.
- Studios like Ninja Theory and Undead Labs will function under new management.
- The restructuring will also impact companies like Activision and Bethesda/ZeniMax.
In yet another gaming tragedy this month, Xbox CEO Asha Sharma has announced a new round of layoffs as part of its major restructuring plan that she calls “Xbox Reset.” This new plan will lead to 3,200 job losses throughout the current financial year, and 1,600 of these positions have been cut immediately. Additionally, four studios that were under Xbox have now left the umbrella for new management.
New Xbox Layoffs Are “Painful,” Says CEO Asha Sharma Days After Announcing Reset Plans
The announcement for the layoffs was made through a staff email sent out by Xbox boss Asha Sharma. She described the situation as “the most significant restructure in XBOX history.” Sharma was clear about the current state of Xbox, stating, “Our business today is not healthy.”
She detailed the “difficult decision” of laying off 3,200 staff members throughout FY27, explaining the challenges that come with a year-long restructuring plan like this. The Xbox CEO stated, “I recognize that a year-long restructuring creates additional challenges. Unfortunately, it is not possible to make all the necessary changes in a single day, and I wanted to be direct about the scale.”
Continuing on this, Sharma stated, “I know this is painful. These changes will directly affect people who have poured their creativity into building XBOX. Today’s decisions do not reflect their talent or dedication.”
The email regarding the layoffs then delved into how the Xbox division has been operating at margins that are 3-10x lower than those of their competitors. Sharma also revealed that the company will be betting on elements like Xbox Game Pass for growth moving forward.
For a slight hint of good news, the email revealed what will happen to studios under the Xbox umbrella after the layoffs. For starters, Compulsion Games and Double Fine Productions will transition into independent studios, allowing them to take their intellectual property and catalogs with them. On the other hand, Ninja Theory and Undead Labs will join new owners, allowing them to finish their ongoing projects like Senua and State of Decay 3.
Additionally, the email also revealed that the management at Arkane, the studio behind Marvel’s Blade, is currently consulting with its Works Council for potential strategic options.
In addition to the departing studios, Xbox will also be implementing layoffs across several other areas. This includes:
- Activision
- Bethesda/ZeniMax
- Blizzard
- King
- Mojang
- Xbox Game Studios
According to the email, the company wants to simplify its internal structure and streamline operations for higher-priority projects driven by developers like Mojang and King. On the other hand, Xbox just raised its console prices days after GTA 6 pre-orders went live, which would explain the financial turmoil the company finds itself in.
While Sharma expressed a desire to refocus the company’s efforts, news of layoffs at Xbox, or any major game studio, could not come at a worse time. With the recent developments like Halo going over to Activision, Xbox players are waiting to see how this restructuring will pay off for the company in the long run.
What are your thoughts on the new round of layoffs at Xbox? Tell us in the comments below!
