Xbox CEO Asha Sharma has confirmed roughly 3,200 role eliminations across Microsoft Gaming through fiscal year 2027, with approximately 1,600 cuts landing the day of the announcement Asha Sharma. Four studios will exit Xbox entirely under new management as part of the restructuring. Sharma called it "the most significant restructure in XBOX history" Asha Sharma.

id Software is among the hardest-hit studios. Reporting indicates around half of id's staff were potentially cut, with the majority of its coding team eliminated Eurogamer. The cuts landed the same week id shipped downloadable content for Doom: The Dark Ages Eurogamer. A ZeniMax union representing Bethesda Game Studios and ZeniMax staff said both organizations were "hit hard" by the restructuring, while characterizing id Software as having survived but been "cut deeply" PC Gamer. GamesIndustry.biz covered the layoffs as they unfolded across the division GamesIndustry.biz, and Digital Foundry reported the same 1,600-plus-1,600 structure, the four departing studios, and the id Software impact in a single dispatch Digital Foundry.

The restructuring is the first major structural move under Sharma, who was named head of Xbox in February 2026 following a leadership shakeup that saw Phil Spencer retire as CEO of Microsoft Gaming and Sarah Bond step down as Xbox president IGN. Matt Booty was promoted within Microsoft Gaming as part of that same reshuffle IGN. PureXbox separately confirmed Bond's exit as concurrent with Spencer's departure Pure Xbox.

Sharma's numbers describe a two-stage process: roughly half the total cuts have already taken effect, with the remainder phased in through fiscal 2027, which for Microsoft runs into mid-2027. The four studios leaving Xbox management were not individually named in Sharma's post, though the framing — departure "to new management" rather than closure — suggests divestiture or spin-off rather than shutdown, a distinction that matters considerably to the affected teams and to any acquirer's due diligence.

The id Software detail is the sharpest data point to emerge so far. A studio built its reputation on tight, veteran engineering teams — the kind of organization where losing a majority of coders is not a headcount adjustment so much as a capability question. Shipping DLC in the same window as deep cuts to your own coding staff is an unusual juxtaposition, and it raises an obvious operational question about who maintains and patches that content going forward, one neither Bethesda nor Microsoft has yet addressed publicly.

The union statement adds a layer worth noting for its specificity: it draws an explicit line between Bethesda Game Studios and ZeniMax, described as hit hard, and id Software, described as surviving but deeply cut. That distinction from a labor body — as opposed to a corporate statement — is one of the few third-party characterizations of relative severity across Microsoft's stable of studios, and it complicates any reading of the restructuring as uniformly distributed.

Xbox has been through leadership and structural change before, but the compression of events here is notable on its own terms: a CEO transition in February, followed within five months by cuts described by that same new CEO as historically unprecedented for the division. Whether the two are causally linked — a new leader moving quickly to reshape cost structure, versus a restructuring plan already in motion before Sharma's appointment — is not established by the available record, and Microsoft has not laid out the rationale beyond Sharma's own characterization.

What happens to the four departing studios matters more than the headline headcount number, in this author's view. Layoff totals get reported and largely forgotten; where those studios and their IP land, and under whose stewardship, will shape which franchises survive the transition intact. Readers who have watched console-industry consolidation over multiple cycles will recognize the pattern of studios changing hands without necessarily changing address — the harder question is always what happens to the people and the pipelines, not the org chart.

The immediate practical concern is continuity of support for live titles, Doom: The Dark Ages among them, given the coding-staff losses at id specifically. Microsoft has not issued a statement addressing post-launch support plans for that content in light of the cuts, and none of the sources reviewed here include one.