Job cuts reported across major Xbox gaming studios

In a major shift for the gaming industry, Microsoft has announced a significant restructuring of its Xbox division as of July 2026.

Under the leadership of CEO Asha Sharma, the company is cutting approximately 3,200 gaming jobs, citing profit margins that trail significantly behind competitors.

Instead, Microsoft is now shedding assets, moving studios like Double Fine and Ninja Theory toward independent or new ownership.

While the company pursues a leaner, more profitable model focused on high-impact franchises, the implementation of these cuts has faced harsh criticism.

Analysts suggest this move reflects a broader industry contraction, highlighting a challenging transition as Microsoft pivots away from its 'Netflix of gaming' ambition toward a more cautious, bottom-line-focused financial outlook.