Microsoft to cut 3,200 Xbox jobs and close four studios

Microsoft will eliminate 3,200 Xbox positions and close four studios as part of a restructuring of its gaming division. Xbox CEO Asha Sharma stated in a memo that the business is "not healthy" and told Fortune that "we simply spread ourselves too thin." The cuts include 1,600 jobs effective immediately and another 1,600 scheduled for the next fiscal year.

assets Microsoft continues to operate Xbox Series X and S hardware sales and has teased a next-generation console codenamed Project Helix. Its game studios include Halo Studios, Bethesda Game Studios, Mojang Studios, Infinity Ward, Treyarch, The Coalition, Playground Games, Blizzard Entertainment, King, and Rare.

Sharma has elevated Mojang and King to report directly to her, noting they are the division's largest by monthly active players. She appointed Helen Chiang as Xbox's first COO.

Sale speculation New York University professor Joost van Dreunen told The Verge that a full divestiture of Xbox remains possible but is the less likely path. He said few buyers would want an interactive-entertainment business generating more than $23 billion in annual revenue.

IDG Intelligence president Yoshio Osaki said individual studios, intellectual properties, or teams could be sold or spun off. Microsoft has previously allowed Compulsion Games and Double Fine Productions to operate independently and sold Ninja Theory and Undead Labs.

Van Dreunen noted that scaling Xbox back or selling parts of it could free cash for Microsoft's AI investments. Osaki expects clearer direction by year end, while van Dreunen projected it could take up to 24 months.