Xbox warns of ‘reset’ as it prepares for layoffs

Microsoft’s Xbox division will face major layoffs next month, according to people familiar with Microsoft’s plans.

The company has been preparing for internal layoffs for weeks, with Xbox CEO Asha Sharma hinting at “making tough choices.” last month. Sources indicate that the cuts may include studio closures or changes to the Xbox studio lineup. Recently Giant bomb episoderumors of laying off 1,000 employees in Microsoft’s Xbox division were mentioned. Bloomberg It also reported today that the cuts would be “significant.”

Moments ago BloombergReport, Xbox CEO Asha Sharma and Chief Content Officer Matt Botti Send a note to Xbox employeesWarning about “Xbox Reset” in the next 100 days. Sharma and Butti pointed to the difficult challenges facing the company. “Excluding Activision Blizzard King, over the past five years, we have spent more than $20 billion on ongoing investments in content, platform, and hardware support, but our annual revenues declined by nearly half a billion during that period,” they wrote. “Going forward, this cannot continue.”

They also noted that “we are facing a hardware component crisis,” saying that component costs for the 2027 holiday season are expected to be “more than 5 times the prices we paid just two years ago. Memory costs have followed a broadly similar path.” “We need a new business model and hardware partnerships while remaining committed to Helix,” they said.

Sharma and head of Xbox strategy Matthew Ball have hinted that “Radically different“Console Business Models” this week, and the mention of “hardware partnerships” certainly plays into the idea that other PC OEMs may be able to create Xbox-branded hardware based on the new AMD chips in the future.

But for now, “the current Xbox infrastructure is not built for the battle ahead,” Sharma and Booty wrote. “We will evolve and rebuild our portfolio and consider capabilities across all XBOX consoles and potential M&A to help us win in hardware, PC, mobile and streaming.”

Sharma has already taken some big decisions since taking office, including taking the decision Gears of War: Electronic Day and The revolution of the hour Xbox console exclusives.