Asha Sharma has explained Microsoft’s latest round of job cuts.
Microsoft has axed 4,800 jobs.
The US technology giant has announced that it’s axing 2.1 percent of its entire workforce, with the company’s Xbox division set to bear the brunt of the latest round of lay-offs.
Asha Sharma, who recently took over as Xbox’s chief executive, said on X: “This is an important email I sent today to all employees at XBOX:
“Team,
“We are beginning the most significant restructure in XBOX history. After careful consideration, I’ve made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include approximately 1,600 role eliminations today, and in addition, four studios will leave XBOX to new management. 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.
“I know this is painful. These changes will directly affect people who have poured their creativity into building XBOX. Many joined us through acquisitions, while others were recruited here, or sought us out because they loved this industry and loved XBOX. Today’s decisions do not reflect their talent or dedication. (sic)”
Sharma was blunt in her assessment of the company’s current performance.
She wrote: “Our business today is not healthy. We are operating at margins that are 3–10x lower than comparable platform and publishing businesses. We entered Gen 9 with a smaller install base and a higher cost structure. To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content.
“While those businesses have created meaningful value, they did not grow at the pace we expected. As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history. We must reset XBOX. (sic)”
Sharma stressed that while changes are necessary, she remains optimistic about the long-term future of the company.
She said: “I want XBOX to be one of the few companies that entertains more than a billion people each day and gives everyone the opportunity to create and connect. I know we can achieve this goal. XBOX has many of the most beloved franchises in entertainment history, talented studios around the world, and we will return to growth in 2027.
“History is full of companies that mistake longevity for inevitability. We will not be one of them. (sic)”
Microsoft announces latest round of job cuts
