Xbox Restructures, Divests Studios Amid Layoffs
Xbox is undergoing a significant restructuring, including substantial layoffs and the divestment of several internal studios. CEO Asha Sharma cited spreading resources too thin as a reason for the changes. Microsoft is also reportedly considering making Xbox a wholly-owned subsidiary to improve performance and accelerate first-party game releases.
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"We simply spread ourselves too thin" – Xbox's Asha Sharma on firm's restructuring plans
Xbox CEO Asha Sharma detailed the company's restructuring plans, which include 3,200 layoffs and the divestment of five internal studios: Compulsion Games, Double Fine, Ninja Theory, Undead Labs, and Arkane Lyon. Sharma stated that Xbox "spread itself too thin" with various bets, leading to a weakening of its core business and a need to streamline management and refocus resources.
Resetting XBOX
Xbox is undergoing its most significant restructure in history, involving approximately 3,200 job reductions throughout fiscal year 2027, with 1,600 roles eliminated immediately. Four studios, including Compulsion Games and Double Fine Productions, will transition to independent management, while Ninja Theory and Undead Labs are in terms to join new ownership. This strategic reset aims to improve profitability and focus on core businesses, with a simplified organizational structure and a new Chief Operating Officer, Helen Chiang, overseeing operations.
Microsoft reportedly considering restructuring Xbox into its own "wholly-owned subsidiary" and "moving faster" on releasing first-party games
Microsoft is reportedly considering restructuring Xbox into a wholly-owned subsidiary or a joint venture to improve its business performance. This potential move is accompanied by plans to accelerate the development of first-party games from franchises like Halo, Fallout, and The Elder Scrolls. The company is also reportedly planning significant budget cuts and layoffs as part of a broader business reset for the Xbox brand.
Xbox Could Become Its Own Entity, Claims Report
A report suggests Microsoft is considering restructuring or spinning off the Xbox brand due to financial losses on consoles. While investments in games are planned, upcoming layoffs are raising concerns about the future of the Xbox division.