Xbox may be heading into another period of restructuring, as reports suggest that Microsoft’s gaming division is preparing for a fresh round of layoffs in July.
According to information shared internally, Xbox CEO Asha Sharma informed staff that an overhaul of Microsoft’s gaming operations would begin in the days ahead. Although the letter reportedly focused on rebuilding parts of the company’s platform infrastructure, sources claim that job cuts are expected to follow after Microsoft’s fiscal year closes on June 30.
At the time of writing, it remains unclear how many employees across Xbox and its various gaming subsidiaries could be affected.
Cost-Cutting Measures Expected
Besides potential layoffs, Xbox is also expected to reduce marketing budgets and make cuts in other areas of the business. However, the extent of those reductions has not yet been revealed.
The timing comes shortly after the Xbox Games Showcase, making the reported changes somewhat unexpected for both employees and fans.
Profit Margins Under Pressure
According to Sharma, Xbox’s profit margin has reportedly fallen to 3% compared to the previous year. She also stated that, excluding the Activision Blizzard acquisition, Microsoft invested more than $20 billion into ongoing gaming operations over the last five years.
Despite those investments, annual revenue is said to have declined by nearly half a billion dollars during the same period, putting additional pressure on the company to improve profitability.
Waiting for Official Confirmation
While layoffs have not been officially announced, reports indicate that changes could begin shortly after the current fiscal year ends. Until Microsoft provides additional details, the scale of the restructuring and its impact on Xbox employees remains unknown.
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