Xbox CEO Asha Sharma outlined a restructuring plan amid the company's largest-ever layoff announcement, cutting 3,200 jobs across multiple studios including Obsidian and id Software. Sharma cited operating margins three to ten times lower than comparable businesses, overextension of the studio system, underfunded franchises, and a hardware component shortage driven by AI data center investment as key factors. Xbox plans to experiment with new hardware business models like buy-now-pay-later, expand to mobile and PC, and shift toward supporting independent creators rather than owning studios outright. This marks the fifth major round of layoffs since Microsoft's $70 billion Activision Blizzard acquisition in 2023.
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