Xbox Plans Three More Layoff Rounds in Sharma Reset
Xbox plans three more layoff rounds through January under CEO Asha Sharma's reset, Fortune reports, extending 2026 cuts that already took thousands of jobs.
Microsoft's Xbox division is preparing three more rounds of layoffs, according to a new report from Fortune. Xbox CEO Asha Sharma plans job cuts this month, followed by further rounds in November and January, as she pushes a sweeping reset of the gaming business. Microsoft has not publicly confirmed the latest plans or said how many employees the new rounds would affect. The report extends a restructuring that has already eliminated thousands of jobs across Microsoft's gaming operations this fiscal year.
Three more rounds on the way
According to Fortune's reporting, Sharma is planning job cuts starting this month, with additional rounds in November and January. The planned cuts are the next phase of what Sharma has described as a fundamental reset of how Xbox operates and invests. The exact size of the coming rounds is unclear, and Microsoft has not said whether they fall inside the job-cut target Sharma announced earlier this year. The report remains subject to change, but for Xbox employees it signals more months of uncertainty.
Thousands of jobs already cut this year
In July this year, Sharma announced plans to eliminate about 3,200 jobs during Microsoft's fiscal 2027, which ends in June, with around 1,600 positions cut immediately. A further round affecting roughly 260 employees followed in September. Sharma took over Xbox in February 2026 after Phil Spencer stepped down. In a message to employees earlier this year, she said the business was not healthy and acknowledged that Xbox was operating with margins far below comparable platform and publishing companies. She has argued that years of heavy investment in content, hardware, platforms and studio acquisitions did not deliver the growth Microsoft expected. The restructuring aims to simplify the organization, cut costs and focus on projects with stronger commercial prospects.
Studios reshaped and Halo moved
The reset has already redrawn the map of Xbox's studios. Double Fine and Compulsion Games were allowed to become independent again, while Ninja Theory, the developer behind the Senua games, may face closure. The Halo franchise has been moved under Activision, the maker of Call of Duty. Despite the cuts and persistent buyout rumors, Microsoft insists it is not walking away from gaming. Sharma told The New York Times in a September interview: "Xbox is not for sale."
Hardware plans continue despite the cuts
Even while trimming headcount, Microsoft is still planning its next generation of Xbox hardware. The Fortune report says Xbox intends to launch a dedicated handheld device in 2027, followed by its primary Project Helix home console in 2028. Internal projections estimate Project Helix could launch at a price of $1,200 to $1,800, pushed up by rising costs for RAM, storage and graphics processors.
Sources
- Times of India - https://timesofindia.indiatimes.com/technology/tech-news/xbox-ceo-is-reportedly-planning-three-more-rounds-of-job-cuts-starting-this-month-layoffs-are-part-of-what-ceo-asha-sharma-described-as-fundamental-reset-of-how-xbox-operates-and-invests/articleshow/135086206.cms - Android Headlines - https://www.androidheadlines.com/2026/10/xbox-three-new-rounds-layoffs-asha-sharma-reset.html - Notebookcheck - https://www.notebookcheck.net/Xbox-reportedly-plans-three-more-rounds-of-layoffs.1429496.0.html