Xbox Plans Major Layoffs as Margins Hit 3%
Asha Sharma's restructure letter signals significant cuts after June 30 — and possibly a studio closure — as Game Pass reportedly bleeds subscribers.
Xbox CEO Asha Sharma just told staff a sweeping restructure is coming, and multiple reports say significant layoffs land right after the fiscal year closes June 30 — with at least one studio closure reportedly on the table. The reported numbers are brutal: profit margin down to 3%, annual revenue down nearly $500M over five years, and that's after a reported $20B+ in investments not counting the $69B Activision Blizzard deal. Game Pass, the entire strategic bet, has reportedly lost millions of subscribers since the October 2025 price hikes. Sharma has been in the job since February, so this reads as the new boss writing down the old boss's strategy. Microsoft spent a decade buying its way to the biggest publisher in gaming and is now discovering that owning everything doesn't matter if the subscription engine underneath stalls. If a studio does get closed, expect the "record investment in gaming" talking point to age very badly.