Why Asha Sharma Is Cutting 3,200 Jobs To Save Xbox
It’s the kind of announcement nobody wants to read.
Just months into her tenure as Xbox CEO, Asha Sharma has confirmed what she describes as “the most significant restructure in Xbox history.” Over the next financial year, Xbox will reduce its workforce by approximately 3,200 employees, with around 1,600 jobs disappearing immediately. Alongside the layoffs, four Xbox studios will leave Microsoft’s ownership as the company attempts to rebuild a business Sharma openly admits “is not healthy.”
“We spread ourselves too thin”
It’s a brutal decision, one that will impact thousands of talented developers, artists, designers, producers and support staff who have spent years helping to build Xbox. While the business reasons make sense on paper, the human cost should never be forgotten.
One thing that separates Sharma’s announcement from previous Xbox restructures is just how direct this one is, rather than hiding behind corporate spiel and shitty jargon, she has admitted that it is just completely broken.
According to Sharma, Xbox invested heavily across acquisitions, subscriptions, cloud gaming, mobile ambitions and expanding its studio network. Whilst a lot of people will tell you otherwise, it did make them one of the largest game companies in the world, but that came with the fact they simply couldn’t and weren’t prepared to handle it.
Her conclusion? Xbox tried to do too much, the saying “Run before you walk comes to mind”
Whilst the ideas were there, the execution wasn’t, which has led Xbox to the new strategy built around three main priorities –
- Reset the content portfolio
- Reset the Xbox platform
- Reset how the company operates
The aim being a leaner Xbox that focuses on profitability and performance rather than sheer scale and dominance.
A Painful Reality
Layoffs in gaming have unfortunately become all too common over the past few years but looking at 3200 is a whole new level.
For those employees this isn’t about strategy, it’s mortgages, families, careers, all of these things put into risk due to Xbox being too greedy and not equipped for what they wanted to achieve.
Many of those affected worked on games millions of players have enjoyed, and they’ll now find themselves looking for work in one of the toughest employment periods the games industry has experienced in decades.
No amount of messaging and transparency changes that reality.
Was This Inevitable?
Looking back over the last several years, it’s difficult to argue Xbox wasn’t carrying enormous weight.
The acquisitions of Bethesda & Activision Blizzard transformed them into arguably the biggest game publisher overnight. Gamepass did see expansion once upon a time, cloud gaming was coming into the picture, new hardware was in development and Xbox began releasing more games across competing platforms.
Each initiative makes sense when you speak about them individually.
Together they have created nothing but an untamable juggernaut that has come crashing down spectacularly. Losing 64 cents to every dollar invested and seeing margins far below industry expectations. While the company pumped billions into it, eventually something had to give.
The Future Looks Smaller But Sharper
The restructuring isn’t just about cutting jobs, Xbox is also making changes to their studio portfolio, 4 studios are now leaving the Xbox umbrella, Double Fine & Compulsion are going independent and also retaining all their IP’s. Undead Labs & Ninja Theory are also being bought out by new buyers, we’re not sure who yet, so no games that have been shown are closing, which is an EXTREMELY small cherry on top of this huge shit cake.
Whether this is the right move, we’ll wait and see…
Fewer studios means greater focus, the cutting of all these members is horrible, but reading that things went through 14 layers of management is just ridiculous. Horrible management by Xbox, they now look forward to having that number as low as 3, and up to 5 layers of management, once again, not saying it’s good, but it’s the right thing to do.
Can Xbox Win Back Trust?
Perhaps the biggest challenge isn’t financial, it’s confidence.
Fans have already watched Game Pass change, Xbox exclusives arrive on other platforms, leadership change following Phil Spencer’s departure, and now the largest restructuring in the brand’s history.
That’s a lot of uncertainty in less than a year and if Sharma’s strategy succeeds, Xbox could emerge as a more focused, healthier business capable of competing for decades to come.
If it doesn’t, these layoffs will be remembered as another painful chapter in a long period of instability.
Final Thoughts
No company wants to announce thousands of redundancies.
No employee wants to receive that call.
Asha Sharma believes this is the only way to secure Xbox’s future, and perhaps history will prove her right.
But today isn’t really about strategy.
It’s about the 1600 and soon to be 3200 people whose lives have been turned upside down in the hope that one of gaming’s biggest brands can find its footing again.
For everyone affected, we can only hope the industry recognises the incredible talent now entering the job market and that the next chapter begins sooner rather than later.