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Microsoft has officially confirmed major changes to Xbox's structure. Xbox CEO Asha Sharma told employees that the company is launching the largest reorganisation in the brand's history. The company plans to make thousands of employees redundant, simplify its organisational structure and change how it manages its development studios. All of this is intended to help Xbox get back on a growth trajectory after difficult years. At the same time Microsoft assures that no previously announced first-party games have been cancelled.
Xbox will cut thousands of jobs and restructure its studios
Microsoft has announced a reduction of around 3,200 positions in fiscal year 2027. The first wave will affect about 1,600 roles immediately, with further changes phased over time. The company admitted that the current business model is not delivering the expected results. According to Asha Sharma, Xbox's margins are three to as much as ten times lower than those of comparable companies in the industry. Microsoft also acknowledges that the growth of Game Pass and the strategy of releasing games across multiple platforms has not progressed as quickly as planned. As part of the changes, Compulsion Games and Double Fine Productions will return to being independent studios along with their brands. Ninja Theory and Undead Labs are to be transferred to new owners, who will complete development of the games Senua and State of Decay 3. The changes will also affect teams at Activision, Bethesda, Blizzard, King, Mojang and Xbox Game Studios. Microsoft stresses, however, that all previously announced first-party games remain in production. The company also intends to step up support for independent developers through further development of tools and its platform.
Microsoft wants to simplify the structure and rebuild Xbox
The second pillar of the restructuring will be a rebuild of the Xbox organisation itself. Microsoft intends to reduce the number of management layers to a maximum of five, and where possible even to three. The company also plans to halve spending on external suppliers and simplify the software development process. A new chief operating officer position responsible for the whole Xbox business will be created. Helen Chiang, who has previously worked on, among others, the Minecraft brand, will take on the role. Microsoft expects the new management to allow faster decision-making and better use of available resources. At the same time the company says that despite the tough changes it will continue to invest in developing the platform and in new games. The aim remains to return to growth in 2027 and to continue building Xbox into one of the world’s largest gaming platforms. According to management, the restructuring is intended to create a foundation for the brand’s next decade of growth.
Microsoft is launching the largest restructuring in Xbox's history. Redundancies, changes at studios and a new management model are intended to improve the company's performance and prepare the platform for the years ahead, while maintaining all announced first-party games.
source: Xbox
