Nadella backs Xbox cuts as division targets return to growth
Microsoft chief executive Satya Nadella has praised ongoing "streamlining" at Xbox days after the division cut another 268 roles.
The remarks were published on 26 September 2026 in an appearance on the Sources podcast with Alex Heath, where Nadella discussed the overhaul of the brand under Xbox chief executive Asha Sharma Eurogamer. He said the team is working to return Xbox to growth in the next fiscal year, a 12-month financial period used for planning and reporting.
"There's some amount of streamlining the team is doing, and Asha is doing, which is great to see," Nadella said. He added that he feels "fantastic" about Xbox's IP portfolio, its library of owned game franchises, and its ability to produce great games in future.
The praise followed confirmation of another 268 layoffs at Xbox. That round came after a much larger restructuring announced in July by Sharma, which affected 3,200 employees. Of those, 1,600 departures took effect immediately, in what Sharma described as the most significant restructuring the games business had undertaken.
As part of that July restructuring, two first-party studios, teams owned by Xbox to make its own games, were allowed to go independent. They were Double Fine, known for Psychonauts, and Compulsion Games, maker of South of Midnight.
Sharma, a former Microsoft AI executive, was promoted to lead Xbox in February 2026 The Verge. The wider changes since her appointment have been described as a "reset" for the organisation Yahoo Finance. That has included bringing more technical staff into the Xbox platform team and responding to long-running complaints about a lack of Xbox exclusives, games available only on one system, with a short "hear you" message in February.
For players, this means the focus is now on what Xbox publishes rather than where it is played. Nadella pointed to franchises and future output. Sharma's team points to growth next fiscal year. Neither set out new game announcements or dates in these remarks.
