Microsoft's Xbox division will undergo significant changes, shedding 3,200 jobs and four game studios in what CEO Asha Sharma describes as "the most significant restructure in Xbox history." The announcement was made on Monday in a memo titled "resetting Xbox." Layoffs will begin immediately, with about 1,600 layoffs occurring today and the rest spread over the next 12 months.
Details of the Xbox Restructure
Sharma acknowledged the challenges associated with a year-long restructuring, stating, "Unfortunately, it is not possible to make all the necessary changes in a single day, and I wanted to be direct about the scale." This job cut is part of a broader layoff strategy at Microsoft, which will see a total of 4,800 jobs eliminated, primarily affecting commercial operations alongside Xbox.
The restructuring will result in the spin-off of Compulsion Games and Double Fine Productions to operate independently, while Ninja Theory and Undead Labs will secure new funding and ownership. Sharma emphasized that the current business structure is "not healthy," citing lower margins and growth than anticipated.
Management Changes at Xbox
Sharma pointed out that Xbox faces a severe hardware crisis, necessitating a reset. She criticized the existing management structure, which has grown overly complex, stating that decisions currently pass through 14 layers of management. The aim is to simplify this process to no more than 5 layers, and ideally 3.
