Xbox Plans Three Additional Rounds of Layoffs
CEO Asha Sharma continues cost-cutting measures amid a strategy shift toward prioritizing established franchises.
Updated on Oct. 20, 2026 in Business Strategy
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Xbox is set to implement three more rounds of staff reductions in the coming months as the company seeks to improve its financial performance. These cuts follow previous layoff announcements earlier this year as part of a broader corporate reorganization.
Why it matters
The company faces significant pressure to increase profitability while managing rising hardware costs. By narrowing its focus to established projects, management aims to secure a more sustainable financial future for the organization.
Microsoft previously laid off 1,600 employees in July and an additional 260 workers in September. These actions are part of a larger plan to cut 3,200 jobs during the current fiscal year.
The players
Asha Sharma
She has served as the CEO of Xbox since February 2026 and is overseeing the current corporate restructuring.
Microsoft
This multinational technology corporation is the parent company of Xbox and is managing the current workforce reduction initiatives.
The details
Under CEO Asha Sharma, who took the helm in February 2026, the company is reorganizing its studio structure and spinning off entities like Double Fine and Compulsion Games into independent firms. Ninja Theory is currently facing potential closure as part of this shift toward clearer commercial prospects.
Timeline
Asha Sharma became Xbox CEO in February 2026.
The company announced plans to cut 3,200 jobs in July 2026.
Microsoft laid off 260 employees in September 2026.
The first of three upcoming layoff rounds is scheduled for October 2026.
The final layoff round is set for January 2027.
Market Landscape
This move reflects the ongoing consolidation and cost-optimization trend currently sweeping across the gaming industry. It positions the company to better compete with rivals by shedding non-core studios and focusing resources on established, high-revenue franchises.
Customers may notice changes to the release schedules of upcoming titles or the cancellation of projects as the company narrows its development focus. These corporate shifts could also affect the long-term support and availability of games from specific studios now operating independently.
The takeaway
Management is prioritizing financial stability by streamlining its internal portfolio and studio operations. Investors and fans should expect continued structural changes as the company aligns its resources with higher-performing, established brands.
Further reading
For more on the changing operational landscape in tech, explore the Business Strategy section.
Source note: This article includes information reported by Notebookcheck.
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