Barely a month after Xbox CEO Asha Sharma delighted fans by giving away free 25th Anniversary Series X25 consoles at Xbox FanFest LA, she has sent shockwaves through the gaming world with an internal email announcing what she called "the most significant restructure in Xbox history".
In the note sent to employees this Monday, Sharma confirmed plans to reduce Xbox's workforce by approximately 3,200 roles through fiscal year 2027, including 1,600 job cuts effective immediately, alongside four studios departing Xbox for new ownership.
At FanFest in June, Sharma had told a cheering crowd that everyone wearing a "fan" badge would receive the limited-edition, translucent green console free of charge when it launches in November 2026, a gesture widely celebrated as a public-relations triumph for the newly appointed, India-origin CEO.
Weeks later, her tone has shifted markedly, with Sharma acknowledging in her email that "our business today is not healthy," citing profit margins three to ten times lower than comparable gaming platforms and publishers.
Sharma attributed the crisis to a smaller console install base entering the current console generation, higher costs, and slower-than-expected growth from bets on Xbox Game Pass and multi-platform releases.
She also pointed to what she described as the industry's "most severe hardware crisis" in history, a reference to broader turbulence including component shortages and rising development costs that have squeezed margins across console makers globally.
Studios such as Compulsion Games and Double Fine Productions will become independent, while Ninja Theory and Undead Labs move to new ownership to continue projects including the next instalments in Hellblade: Senua and State of Decay titles.
Helen Chiang has been promoted to a newly created Chief Operating Officer role overseeing content, hardware, platform and services.
The restructuring comes as Xbox simultaneously pursues its next-generation console, Project Helix, with alpha hardware units due to reach developers in 2027, built in partnership with AMD for a major leap in ray-tracing performance. Sharma insisted the cuts reflect "a bigger future for Xbox, not a smaller one," with a promised return to growth in 2027.
While this is happening, buying an Xbox in India is still a dicey affair, marred by supply chain issues and general logistical hurdles that new gamers usually do not bother with. In contrast, you can buy a PlayStation in India in 10-20 minutes from quick-commerce websites.
