Xbox reportedly plans three more rounds of layoffs

Xbox CEO Asha Sharma is reportedly preparing three additional rounds of layoffs, with cuts planned for October, November, and January. The reported cuts would extend a restructuring that has already affected thousands of employees and reshaped Microsoft’s gaming studios.

In July, Sharma announced plans to cut 3,200 jobs during Microsoft’s 2027 fiscal year as part of an organizational “reset.” That announcement included 1,600 immediate cuts. Microsoft laid off around 260 more employees in September. The report does not specify how many people the upcoming rounds will affect or whether they are all included in the previously announced total.

Sharma has been reshaping Xbox since taking over in February 2026, arguing that the business needs a more focused strategy and stronger financial performance. The changes have included layoffs and studio reorganizations. Double Fine and Compulsion Games have been allowed to become independent again, while Ninja Theory, the developer behind the Senua games, may face closure. The company has also been prioritizing established franchises and projects with clearer commercial prospects.

The restructuring comes as Xbox faces pressure to improve profitability while dealing with rising hardware costs and mixed results from its recent expansion. In an earlier memo to employees, Sharma described the business as unhealthy and said previous investments and strategies had not delivered the expected growth.

For Xbox employees, the prospect of three more rounds of cuts means further uncertainty as the company continues its reset. However, the reported plans remain subject to change, and Microsoft has not publicly confirmed the details of the proposed rounds.