Microsoft to cut more than 3,000 jobs from ailing Xbox unit
Microsoft moves to slash costs as the video game industry faces what the tech giant calls the "most severe hardware crisis in its history."
Updated on: July 6, 2026 / 12:27 PM EDT / CBS News
Microsoft said Monday that it will cut 3,200 jobs from its struggling Xbox video game business.
The technology giant will immediately eliminate 1,600 positions, while other jobs will be cut as four game development studios leave the Xbox unit.
"Our business today is not healthy," Xbox CEO Asha Sharma, who took over the gaming division earlier this year, said in a memo to Xbox workers released by Microsoft. "We are operating at margins that are 3-10x lower than comparable platform and publishing businesses."
Sharma also acknowledged that Microsoft's investments in Game Pass, a subscription gaming service, and multi-platform services have grown more slowly than expected.
"As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history. We must reset Xbox," she said.