Xbox’s ‘Reset’: All the News About Microsoft’s Looming Layoffs and Studio Closures

Xbox is once again undergoing significant changes. On June 10, 2026—just months after Asha Sharma succeeded Phil Spencer as CEO—she and newly promoted Chief Content Officer Matt Booty issued an internal memo warning staff of an “Xbox reset.” The memo cited major business challenges, including a mandatory 3 percent “accountability margin,” surging component prices for consoles driven by a memory and storage shortage, and an “overextended” studio system. That same day, The Verge and Bloomberg reported that the Xbox division was planning layoffs in July. The cuts, expected to be announced on July 6, may include studio closures or spinoffs. On June 30, The Verge’s Tom Warren reported that Microsoft is considering closing at least five studios and potentially canceling games such as Blade. Under Sharma’s leadership, Xbox has already enacted several major changes: upcoming price hikes for Xbox consoles due to the memory shortage, lowering Game Pass prices while excluding new Call of Duty titles from the service, rebranding Xbox to “XBOX,” and locking both Gears of War: E-Day and Clockwork Revolution as Xbox console exclusives. Read on for all our coverage of the shifts at Xbox.

via The Verge