In a move described by leadership as part of a “bigger future,” Xbox has announced a 15% reduction in its total workforce, resulting in 3,200 job losses. Despite the scale of the layoffs, which include four studios moving under new management, CEO Asha Sharma has set an ambitious target for the division: to entertain more than a billion people every day.
In an internal memo to staff, Sharma acknowledged the difficulty of the decision, stating, “I know this is painful.” She framed the current situation as a response to an industry facing its “most severe hardware crisis in history.” According to the memo, the company entered the current generation with a higher cost structure and a smaller install base, both of which contributed to the need for a change in strategy.
A Shift in Strategy
The company’s path to growth, according to Sharma, will rely on three pillars: Game Pass, multiplatform releases, and a broader portfolio of content. While the company has previously reported 500 million monthly active users—a figure that spans a wide range of titles from Candy Crush to Solitaire—doubling that number to reach a billion daily users will require significant expansion, particularly in the PC and mobile sectors.
The shift toward multiplatform publishing is already underway. While console exclusivity has been confirmed for upcoming titles like Gears of War: E-Day and Clockwork Revolution, the broader business model is leaning heavily into a multi-format approach. Sharma noted that while previous investments in Game Pass and multiplatform initiatives created “meaningful value,” they did not grow at the pace the company initially expected, leading to a weakened core business.
Refocusing for the Future
Addressing the workforce reduction, Sharma emphasized that the company plans to invest with “greater focus, greater discipline, and greater clarity.” The layoffs impact five studios in total, though the company has stated that all currently public projects remain in development.
“The next decade of gaming will be larger, more global, and more creative than anything we've seen before,” Sharma wrote. “This year, we'll invest as much in Xbox as we ever have.” Whether that level of investment will be sufficient to reach the goal of a billion daily players remains the central question for a division currently navigating its most significant restructuring in recent memory.