Xbox is reportedly planning three more rounds of layoffs, and the staff who remain near Microsoft’s Redmond headquarters will soon be asked to spend more of their week in the office.
According to a Fortune profile of Xbox chief executive officer Asha Sharma, Sharma is planning the next rounds of layoffs for October, November and January, citing people familiar with the plans. Fortune notes that layoff plans can change, and Microsoft has not publicly confirmed the timing, the teams involved or how many jobs each round would cut.
Fortune reports that Sharma has so far cut 1,868 people as part of a plan to reduce Xbox headcount by 3,200, and has also removed several layers of management. If the remaining cuts stay within that plan, about 1,332 more roles would go. Fortune adds that structuring the cuts in waves has left some staff demoralized, describing employees who feel they are sitting under a yearlong cloud while they wait to learn whether their roles are next. The outlet also says the layoffs have reached longtime staff members who worked at Xbox for decades.
Microsoft pushes back on sale talk
The same report addresses speculation that Xbox is being prepared for a sale or spinoff. Several current and former staff members told Fortune they believe the division is being readied for some kind of new structure. Judson Althoff, who leads Microsoft’s commercial business, rejected that idea. “Asha is one of the best leaders we have at the whole company. We would not have put her on a business we intend to sell,” Althoff told Fortune. “There’s going to be a ton of speculation about all this. Time will tell.”
Fortune’s profile also reported that the next Xbox console could be priced between $1,200 and $1,800, which RCG covered in its report on the next Xbox.
Four days a week in the office
A day after the Fortune report, The Verge reported on an internal memo from Xbox chief people officer Jacinda Chislum Pearson that raises the office requirement for many Xbox employees. Microsoft asked its employees to return to the office three days a week last year.
“Starting February 1st, 2027, Xbox employees in Puget Sound who live within 50 commuting miles of Studio D are required to work from the office a minimum of four days a week,” Pearson wrote, according to The Verge. She described the change as a “need to create more opportunities for people to work together” following feedback from employees.
The Verge reports that the rule applies only to staff close to Microsoft’s Redmond campus, and that the memo appears to leave “established in-office practices” at Xbox studios unchanged. Employees who already hold exemptions will need to submit them again.
“Leaders should be present, and coming into the office should not mean spending the same day on Teams calls from a different building,” Pearson wrote. “Time well spent means reviewing work, solving problems, and playing games together, strengthening our path to becoming one Xbox.”
Both moves are part of the broader reset Sharma has pursued since she took over Xbox in February. Fortune reports she expects financial improvements to start showing in Microsoft’s fiscal 2027, which ends in June 2027.
