Microsoft CEO Satya Nadella has publicly endorsed Xbox’s ongoing restructuring after the gaming division eliminated 268 additional jobs, bringing reported cuts this year to 1,868. The comments frame the layoffs as part of an effort to build a more sustainable gaming business, even as further changes remain possible.
A costly restructuring
The latest reductions follow 1,600 job losses reported earlier in 2026. The restructuring has also combined studios, reshuffled franchises including Halo and removed some developers from the organization. Microsoft Chief Content Officer Matt Booty said Xbox is roughly three-quarters of the way through the announced cuts, indicating that the process may continue before the fiscal year ends.
Margins behind the cuts
Asha Sharma, who is leading the Xbox restructuring, has defended the changes by arguing that Xbox’s margins trail comparable platform and publishing businesses by three to 10 times. The source does not provide a more detailed breakdown of those margin comparisons, so the claim remains attributed to Sharma rather than independently assessed.
A wider platform ambition
Nadella’s stated objective is for Microsoft to operate as both a publisher and a platform provider across PCs and Xbox consoles, reaching more players through both parts of the business. His support for the streamlining places that strategy alongside the immediate workforce impact: thousands of roles have been eliminated while the company continues to work out the business model it considers sustainable.
AI-generated editorial illustration; not a documentary photograph.
Source: Microsoft CEO Says Xbox's "Streamlining" Is "Great To See" Following Recent Layoffs
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