More mass layoffs are set to hit the video game industry, as Xbox is reportedly planning another mass layoff at the end of the month, according to a new report from Bloomberg's Jason Schreier. It's unclear how many employees will be impacted at this point, though an email referenced in the report attributed to Sharma, and recent public comments from Sharma point to it being a significant number of employees.
It'll be made public on June 30, 2026, according to the report at the end of Microsoft's current fiscal year. This comes after Sharma admitted that the Xbox division "isn't particularly healthy," and the company's chief strategy officer, Matthew Ball, was frank about how the company will have to rethink its hardware approach amid rising component costs.
Shortly after the Bloomberg report went live, an Xbox Wire blog post titled 'Next 100 Days: Xbox Reset' went live with the same quotes listed in Schreier's report, along with the notice at the top that the entire text of the post had just been emailed to Xbox staff globally. The post does not make mention of layoffs, but it does nail down the point that Xbox cannot continue in its current form.
"We will end this fiscal year at about a 3% accountability margin, down year-over-year," the post reads. "Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue."
"We expanded our studio system when we needed a pipeline of content to meet multiple strategies across subscription, streaming, and devices. In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content. We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win. At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years."
It's no secret that Xbox revenue has been in decline recently. Sharma's comments only reiterate what we know from reading quarterly reports, the most recent of which reported that Xbox's overall revenue was down 5% while hardware revenue was down by over 30% for the second straight quarter. Sharma even admitted at the time of that report that while the division had made some positive traction, the reality was that "player and revenue growth has not yet met our ambition."
To see Xbox go through another round of mass layoffs will be the latest in an unfortunate series of events that game makers at Microsoft have had to endure. It's another sign of the industry's instability, and it's the second reported mass layoff today after Ubisoft shuttered more studios across the globe.
About the author: David has been writing about videogames, technology, and culture since 2020, with a focus on reporting daily news across multiple publications, including GameDaily.Biz, GameSkinny, and PlayStation Universe before joining Wccftech in 2025. David started contributing as Canada/US reporter for Wccftech's gaming section in 2025. Besides being up-to-date on the industry's movements, he loves interviewing developers, reviewing games, and writing intricate essays about the symbolism and layered meanings to be found in rich narratives as he's done for publications like GamesIndustry.Biz, LostInCult, and others. Outside of games he loves movies, music, theatre, his hometown, and his family, though not necessarily in that order.
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