Microsoft Xbox Cuts 3,200 Jobs, Divests Five Studios
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- Microsoft plans to cut ~3,200 Xbox jobs over the next year — 1,600 effective Monday — and divest up to five studios in what the company calls a 'reset' (Bloomberg)
- As part of the carve-out, Compulsion and Double Fine will become independent studios, while Undead Labs and Ninja Theory will be sold outright
- Xbox CEO Asha Sharma declared the business 'not healthy' (MarketWatch) and tied the cuts to a hardware slump and rising costs (Business Today)
- Reuters, The New York Times, and others frame the cuts as part of an AI-driven tech layoff wave, with GeekWire reporting management has vowed a return to growth in 2027
- Sen. Bernie Sanders seized on the layoffs and a reported Xbox price hike as proof that tax cuts 'never trickle down' (Benzinga) — a political critique most tech outlets skipped
Why it matters: Microsoft is shedding 3,200 Xbox jobs and divesting at least four named studios, with CEO Asha Sharma publicly declaring the business 'not healthy' and blaming a hardware slump and rising costs. GeekWire's coverage notes management has vowed a return to growth in 2027 — leaving at least a year of contraction across Microsoft's gaming footprint before any recovery is even promised.
