Microsoft’s Xbox plans major layoffs next month as low console sales, few blockbuster titles mount pressure

Microsoft’s Xbox division plans major layoffs and significant cuts to marketing and other budgets next month. Bloomberg News It was reported on Wednesday.

The layoffs will be the first major restructuring under Asha Sharma, who took over as CEO of the gaming unit in February.

Microsoft did not immediately respond to this question Reuters request for comment.

Xbox has faced increasing challenges in recent years as Microsoft’s bets on subscriptions and cloud gaming have failed to offset declining console sales and a shortage of blockbuster games.

Xbox revenue down half a billion dollars

Xbox’s margin of liability has fallen to 3% and the company has spent more than $20 billion on content, platform and hardware subsidies over the past five years, even though annual revenue fell by almost half a billion during that period, Sharma said. Bloomberg it was reported, citing an internal email sent to employees.

Xbox will need to rebuild its platform infrastructure and rethink its portfolio in the coming weeks and months, the report said.

The exact scale of the layoffs is not yet clear. This is expected to happen shortly after the close of Microsoft’s fiscal year on June 30, according to the report.

In April, Microsoft lowered prices for its Game Pass service and discontinued day-one releases of future “Call of Duty” games on the platform; this was one of the first major strategy changes under the new game chief.