Xbox's CEO Has Three More Rounds of Layoffs Planned, Report Says
Asha Sharma is reportedly mapping out cuts for this month, November, and January, even as Microsoft insists Xbox isn't going anywhere.
Xbox CEO Asha Sharma is lining up three more rounds of layoffs at the company, with cuts reportedly planned for this month, November, and January, according to a new report from Fortune.
If that sounds like a lot of layoffs in a short window, that's because it is. Sharma has been cutting since the summer. In July, she announced a sweeping organizational "reset" that called for 3,200 job cuts across Microsoft's 2027 fiscal year, with 1,600 of those happening immediately. Then in September, roughly 260 more Microsoft employees lost their jobs. The three newly reported rounds would extend that streak into early next year.
The reset hasn't just meant layoffs. Sharma has also been restructuring which studios actually belong to Xbox. Double Fine and Compulsion Games, two studios Microsoft had owned, are being spun back out into independent companies. Ninja Theory, the studio behind Senua's Saga: Hellblade II, may not survive the shakeup at all — Fortune's report notes the studio could close entirely.
The spin-off question Microsoft keeps batting down
All of this turmoil has fed a persistent rumor: that Microsoft might sell off or spin out Xbox entirely. Fortune's report addresses that speculation directly, and Microsoft's answer is a firm no.
Judson Althoff, who runs Microsoft's commercial business, pushed back on the idea in comments to Fortune. "Asha is one of the best leaders we have at the whole company," he said. "We would not have put her on a business we intend to sell. There's going to be a ton of speculation about all this. Time will tell."
Sharma herself has said as much. In a recent interview with The New York Times, she stated plainly that "Xbox is not for sale."
The framing from Microsoft's leadership is that the layoffs and restructuring are about tightening the business, not preparing it for a sale. Putting one of the company's top executives in charge of a unit you're planning to offload would be an unusual move, which is essentially Althoff's point. Still, the scale and frequency of the cuts have clearly been enough to keep the rumor alive.
Hardware is still on the roadmap
Despite the layoffs, Microsoft isn't stepping back from new hardware. Fortune's report says the company is planning to launch a "next-generation handheld device" in 2027, followed by its Project Helix console in 2028.
That timeline suggests Xbox's hardware ambitions are intact even as its headcount shrinks — a company trimming staff and studio ownership while still committing to multi-year device launches years out. It's a reminder that the layoffs appear to be more about reshaping how Xbox operates internally than about scaling back its long-term plans.
What happens over the next few months will say a lot about how far this reset goes. If the pattern from July and September holds, the cuts reported for this month, November, and January won't be the last word on Xbox's reorganization — just the next three chapters of it.
