Microsoft’s Xbox division is preparing for a wave of job cuts and a sharp reduction in marketing spend, part of new CEO Asha Sharma’s effort to halt a multi‑year revenue decline. The layoffs are expected to roll out shortly after the company’s fiscal year ends on June 30, though exact numbers remain undisclosed.

Layoffs slated after June 30 fiscal year end

Sources close to the Xbox organization say the cuts will be announced soon after Microsoft closes its fiscal year on June 30. While the report does not specify a headcount, the timing suggests the company wants to align the restructuring with its annual financial reporting cycle.

Asha Sharma’s cost‑cutting overhaul targets a $0.5 billion revenue dip

In a recent blog post, Sharma warnd that Xbox’s annual revenue has fallen by nearly half a billion dollars over the past five years, despite more than $20 billion spent on content, platform development, and hardware subisdies. She framed the layoffs as a necessary step to avoid “continuing” unsustainable losses.

Xbox marketing budget to be slashed alongside other units

In addition to staff reductions,the division plans to dramatically trim its marketing budget and cut spending in other business areas. The move reflects a broader shift away from the high‑cost promotional model that has characterized Xbox launches in recent years.

New exclusives Gears of War: E‑Day and Clockwork Revolution signal brand pivot

At the recent Xbox Showcase, the company announced that both *Gears of War: E‑Day* and *Clockwork Revolution* will launch as Xbox exclusives, underscoring a strategic pivot toward proprietary titles. While *Halo* will still appear on PlayStation later this year, the exclusivity of the two new games highlights a renewed focus on differentiating the Xbox brand.

How many jobs will be cut?

The exact scale of the layoffs remains unknown, and no official figure has been released by Microsoft. Analysts are watching for the upcoming fiscal report to gauge the impact,and employees have reported mixed messages about the timing and scope of the cuts.

According to the source report, the restructuring is a direct response to the revenue slide Sharma cited, and it aligns with a broader industry trend of consolidating development resources after several years of aggressive investment.

As the Xbox community awaits further details, the company’s next earnings release will likely reveal whether the cost‑cutting measures have steadied the division’s financial trajectory.