01What happened

The story, straight

Xbox is planning a major wave of layoffs expected after Microsoft's fiscal year ends June 30, according to multiple sources speaking to Bloomberg. The cuts accompany broader spending reductions to marketing and other areas, though the number of impacted employees remains unknown. In an internal email posted to Xbox Wire, CEO Asha Sharma and Xbox Game Studios head Matt Booty acknowledged five 'realities' facing the division, including that despite investing $20 billion in content over five years (excluding the $69 billion Activision Blizzard King acquisition), Xbox annual revenue declined by nearly half a billion dollars over the same period.

Xbox is planning major layoffs after June 30 — Microsoft's fiscal year end — per Bloomberg. The cuts hit alongside spending reductions in marketing and other areas, headcount TBD. An internal email from CEO Asha Sharma and Matt Booty laid out five 'realities,' including a brutal one: Xbox spent $20B on content over five years (not counting the $69B Activision deal) and still saw annual revenue drop nearly half a billion.

02Spread timeline

Where it actually started

Jun 10, 2026Origin
Bloomberg reports Xbox layoffs planned after June 30, citing multiple sources.Bloomberg drops the report — layoffs coming after Microsoft's fiscal year end.
source
Jun 10, 2026
CEO Asha Sharma and Matt Booty email employees acknowledging five 'realities' including revenue decline.Sharma and Booty send internal email framing the situation as five 'realities' — including a $500M revenue drop.
source

03Source receipts

Every claim, linked

Kotaku
Rebekah Valentine's report on Xbox layoffs, citing Bloomberg sources and the Sharma/Booty internal email
primaryrssreceipt

04What's solid, what isn't

What's solid and what isn't

Confirmed
  • Xbox is planning layoffs after Microsoft's fiscal year ends June 30, per Bloomberg.
  • Xbox spent $20 billion on content over five years, excluding the Activision Blizzard King acquisition.
  • Xbox annual revenue declined by nearly half a billion dollars over the same period.
  • CEO Asha Sharma and Matt Booty sent an internal email acknowledging five 'realities' facing the division.
Disputed
  • The exact number of employees who will be impacted by the layoffs.
Developing
  • Whether the spending cuts to marketing and other areas will affect game release timelines.

05Why it matters

The editorial take

This would mark another significant round of cuts for Microsoft's gaming division following mass layoffs in 2024 that eliminated roughly 1,900 positions across Activision Blizzard and Xbox. The revenue decline despite massive content spending raises serious questions about the return on Microsoft's $69 billion Activision acquisition and the broader sustainability of AAA gaming's current cost structure. Xbox has been under pressure to justify its aggressive expansion strategy to investors.

Xbox already gutted nearly 1,900 jobs in early 2024, so this isn't a one-off — it's a pattern. Spending $20B on content and watching revenue drop half a billion is the kind of math that ends with a spreadsheet someone doesn't want to open. The Activision deal was supposed to be the growth engine. Instead it looks like the cost structure caught up.