Today, XBOX leadership released a new email to employees globally titled: Next 100 Days: XBOX Reset. New CEO Asha Sharma and Chief Content Officer Matt Booty talked about what’s next for Team XBOX following the changes and more recently, the XBOX Games Showcase, which revealed its plans for reintroducing exclusives to its ecosystem. Unfortunately, they also warn of ‘reset’ coming. Reports are suggesting that these will come in the form of significant layoffs, which the company has been reportedly preparing internally for weeks.
We just shared with our team the realities we need to navigate as we work to reset the XBOX business. We won’t succeed by hiding hard truths, nor will we succeed by doing the same thing and expecting different results. See the note here: https://t.co/IahtBNzwnR
— ASHA (@asha_shar) June 10, 2026
Team, Over the first 100 days together, we have started to revive XBOX,” Asha and Matt wrote. “Our platform teams have already shipped more updates in the last 100 days than during the prior year combined. We now have more active partners on XBOX than ever before. Our Game Pass team set to work fixing our offering and after 8+ months of decline, our service has started to grow again. And through Player Voice, we have a 24/7 channel to hear directly from players, creators, and developers.”
While things are moving in the right direction, Asha and Matt noted that the next 100 days are critical in continuing that trajectory.
“These results are early, but they demonstrate what is possible when we move faster, stay close to our community, and align behind a shared vision. We have made mistakes, and will continue to make them, but what matters is that we listen, learn, and adjust the course where needed. Remember, our fans are rooting for us. Now we start the next 100 days. It is important to have both optimism and realism as we work to reset the business.”
Sharma and Booty have detailed some of the difficulties that XBOX is facing. ““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,” they wrote. “Going forward, this cannot continue.”
Hardware is still a problem for everyone in the video game industry. “We are in a hardware component crisis,” saying that component costs for the 2027 holiday season are expected to be “over 5x the prices we paid only two years earlier. Memory costs have followed a broadly similar trajectory.” They said that “we need a new business model and partnerships for hardware as we remain committed to Helix.”
“Our current platform infrastructure is not built for the battle ahead,” Sharma and Booty said. “Our systems are overly complex, spanning hundreds of dependencies, which hinders our ability to move fast. We’ve become too reliant on vendors to operate our systems and must become more self-reliant as an engineering culture to build for the future. We must increase the value we ship to players while decreasing the time it takes to do so. Going forward, we’ll evolve and rebuild our stack and look at capabilities across all of XBOX and potential M&A to help us win in hardware, PC, mobile, and streaming.”
Sources are suggesting that the cuts could involve a studio closure, or changes to the XBOX Games Studio lineup. There are also rumors of 1,000 employees getting laid off from the XBOX division of Microsoft. Bloomberg reports that the cuts would be “major” and involve cuts for marketing and other areas of Microsoft’s XBOX business.
Bloomberg says that the first major cuts will be coming in July but we’ll have to wait and see.