Microsoft CEO says Xbox is simply 'streamlining' after cutting over 5,750 jobs in three years

Microsoft CEO Satya Nadella said on the Sources Podcast that the layoffs at Xbox are simply a natural streamlining process and that he feels fantastic about the current IP. Since acquiring Activision Blizzard for $68.7 billion in October 2023, Xbox has carried out five rounds of mass layoffs totaling at least 5,750 workers, with the latest round confirmed in July 2026 set to cut 3,200 people from Xbox Game Studios by the end of the current fiscal year, including the divestment of Compulsion Games, Double Fine and Undead Labs. Nadella said new Xbox boss Asha Sharma told him Xbox will achieve growth and produce some great games in the next fiscal year.