Microsoft is cutting 3,200 jobs from Xbox by the end of fiscal year 2027. Half of them, 1,600, went immediately. The company calls the move a “reset”, and it comes with a sale: four in-house studios, Double Fine, Compulsion Games, Ninja Theory and Undead Labs, are being sold or spun off.
Xbox CEO Asha Sharma put the case in money terms. In a statement she said the division has been running at margins three to ten times lower than comparable platform businesses, and that some studios were losing 64 cents for every dollar invested.
What goes, and what stays
AllKeyShop, which reported the announcement, described the plan as a retreat from the acquisition-led growth model Xbox has followed. The aim is a leaner structure with fewer management layers and more money behind a short list of priority projects.
For players, the reassurance came quickly. Sharma said no first-party Xbox titles or projects will be cancelled as part of the layoffs. Games already in development at the four studios are expected to carry on under their new arrangements while the transitions are finalised, so announced titles stay on the roadmap.
Xbox Game Pass remains central to the strategy, as a steady way to get games onto both PC and console.
