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Microsoft's Xbox division is preparing for a significant restructuring driven by a five-year revenue decline and a severe hardware component cost crisis, with leadership signaling a pivot toward new business models and potential partnerships for future console hardware. The upcoming layoffs and potential studio closures reflect a strategic shift away from the current infrastructure to address soaring memory and component prices expected through the 2027 holiday season. This move underscores the industry-wide pressure on hardware subsidies and the urgent need for Xbox to evolve its stack to remain competitive in a tightening economic environment.

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Xbox warns of a ‘reset’ as it prepares for layoffs

The VergeJune 10, 20262 min read

Microsoft's Xbox division will be hit with significant layoffs next month, according to people familiar with Microsoft's plans. The company has been preparing for the layoffs internally for weeks, with Xbox CEO Asha Sharma hinting about "making hard choices" last month. Sources suggest the cuts could even involve a studio closure, or changes to the Xbox studio lineup. In a recent Giant Bomb episode, rumors of 1,000 layoffs for Microsoft's Xbox division were mentioned. Bloomberg also reported today that the cuts would be "major." Shortly after Bloomberg's report, Xbox CEO Asha Sharma and chief content officer Matt Booty sent a memo to Xbox … Read the full story at The Verge.

Microsoft’s Xbox division will be hit with significant layoffs next month, according to people familiar with Microsoft’s plans. The company has been preparing for the layoffs internally for weeks, with Xbox CEO Asha Sharma hinting about “making…

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