When Microsoft and Xbox began spending heavily to acquire studios, purchase publishers, and fund projects, it looked like a bright new era for the gaming brand was on the horizon. Instead, that expansion has devolved into an ongoing series of layoffs.

To date, Xbox has endured at least 4 major series of layoffs, in addition to a company-wide Microsoft reduction that also hit the gaming division. Unfortunately, the cuts are far from over.

According to a new report, Asha Sharma, head of Microsoft’s video game business, is preparing at least 2 additional waves of layoffs as part of a broader strategy to stabilize the brand’s financial standing.

2 More Layoff Waves Loom Starting Next Month at XBOX

Details published by Fortune paint a grim picture inside Xbox, confirming that Microsoft’s strategy of downsizing to curb costs is not over.

Internal sources speaking on the condition of anonymity indicate that Sharma remains committed to a plan that will eliminate a total of 3,200 jobs, including several management positions. Xbox previously cut 1,800 employees in July, leaving roughly 1,400 remaining roles to be eliminated to meet that target.

The report notes that the next wave of cuts is scheduled for November, with a second wave slated for January 2026. It remains unclear whether these upcoming reductions represent new targets or simply the execution of the existing plan, particularly as Xbox’s financial performance has struggled to rebound despite strategic shifts.

While employees reportedly appreciate Sharma’s candor regarding difficult choices, morale across Xbox development teams has plummeted. With job security virtually non-existent, sources warned that even veteran staff members with long histories at the company are at risk.

Asha Sharma servicio soporte técnico XBOX

Disaster at XBOX: Over 5,000 Jobs Cut

In 2018, under the leadership of Phil Spencer, Xbox launched an aggressive expansion strategy focused on acquiring high-profile studios and publishers. The initiative aimed to bolster Microsoft’s first-party lineup and, at the request of CEO Satya Nadella, discover the company’s next multi-billion-dollar franchise like Minecraft.

8 years later, that plan can safely be called a disaster. Today, Sharma and the new executive team are executing a full “reset” of the Xbox brand, defined by studio closures, cancelled projects, developer layoffs, and internal consolidations designed to make single teams absorb multiple operational responsibilities.

Industry estimates indicate that the 5 major rounds of layoffs affecting Xbox since 2023 have resulted in roughly 5,750 lost jobs.

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