Microsoft is reportedly planning layoffs at Xbox next month.

The company is also sto cut marketing and other budgets after its fiscal year end son June 30.

The restructuring would come months after Asha Sharma was named executive vice president and CEO of Microsoft Gaming in February.

An internal email said Microsoft had a 3% “accountability margin.”

The company also spent more than $20 billion on content, platforms, and hardware subsidies over five years. Annual revenue fell by nearly $500 million during that period.

The cuts would follow several recent layoff rounds in Microsoft’s gaming unit.

The company laid off about 1,900 employees in early 2024, 650 more in September 2024, and started another round at Xbox in July 2025.

Microsoft’s public results have also shown pressure on its console business.

Xbox hardware revenue fell 42% year over year in Microsoft’s fiscal fourth quarter of 2024. Content and services revenue rose 61%, largely because of the Activision Blizzard acquisition.

🔗 Source: Bloomberg

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