Xbox is in for another round of major layoffs in July, as CEO Asha Sharma stated that an overhaul of Microsoft’s gaming division will begin in the days ahead. As of this writing, it is currently unclear how many jobs at Xbox and its various gaming subsidiaries will be affected by the impending cuts.
Sharma’s announcement came just two days after Xbox Chief Strategy Officer Matthew Ball shared a look at the state of Xbox Game Pass. Following a controversial price hike in October 2025, Ball said that Xbox Game Pass lost millions of subscribers across the globe. In April, Xbox walked back some of the changes and lowered the price of Xbox Game Pass Ultimate and PC Game Pass to their current monthly rates of $23.99 and $13.99, respectively. However, the change meant that future Call of Duty titles would no longer be day one releases on Xbox Game Pass.
Xbox Will Make Some Major Job Cuts in July
Days after the Xbox Games Showcase, Xbox is already planning a reset of its company infrastructure. In a letter sent to Xbox staff members on June 10, Sharma laid out some key points of the overhaul, which included a rebuild of the company’s platform infrastructure. While Sharma did not outright state in her letter that any layoffs would happen, sources stated that the job cuts are expected to happen after Microsoft’s current fiscal year closes on Tuesday, June 30. Xbox is apparently planning to cut marketing budgets and other areas of the company, though the extent remains unknown. Sharma said that the company’s profit margin had dropped year-on-year to 3%. Excluding the acquisition of Activision Blizzard, Xbox spent over $20 billion over five years on ongoing investments, with annual revenue declining by nearly half a billion in that time.
After Sharma succeeded Phil Spencer as Xbox CEO in February 2026, some questions lingered over potential layoffs within Xbox and its global studios. The concerns stemmed from a massive round of layoffs that Microsoft conducted in July 2025, which resulted in over 9,000 layoffs across the board. Although Xbox Chief Content Officer Matt Booty said that no layoffs would occur immediately following Sharma’s promotion to CEO, that will likely not be the case once the fiscal year concludes.
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