Xbox CEO says current margins 'cannot continue' in public letter to staff

Gaming Xbox Xbox CEO says current margins 'cannot continue' in public letter to staff The more things change, the more they stay the same. By Anna Washenko June 10, 2026 pm EST As Summer Game Fest draws to a close, it's a fitting time for reflection. Not just on the cool games we saw announced (and there were a bunch), but also on an industry that, in recent years, has reached thrilling new creative and artistic highs alongside deeply depressing lows in the form of layoffs, cancelations and studio closures. Xbox is putting its introspection out in the open. New CEO Asha Sharma and Chief Content Officer Matt Booty penned a public memo to the gaming company's employees to mark the first 100 days of Sharma's tenure leading Xbox. The takeaways are pretty grim. Sources have told the publication that substantial cuts are on the horizon for Xbox. Although the piece doesn't offer any specifics about their scope, the expectation is that layoffs will begin in July, following the end of Microsoft's fiscal year on June 30. It's a brutal situation for Xbox, which already saw several thousands of jobs eliminated in 2024 and again in 2025. And even if the company does once more have to downsize and abandon promising new games this summer, that still won't be an instant fix for its problems. It took several years of questionable decisions to dig the hole that Xbox is currently in. It'll take several years with a patient and sustainable approach, and probably no small amount of luck, for the business to dig itself out. That's no shade to Sharma or her predecessor Phil Spencer. That's just the nature of being one cog in a behemoth business machine like Microsoft, where the goals of making amazing video games and video game hardware are often not aligned with the goal of making investors and shareholders happy.