Xbox Sends Intenal Memo to Staff, Warning a ‘Reset’ is Approaching

Xbox CEO Asha Sharma and CCO Matt Booty have sent a memo to staff members following the first 100 days since the duo stepped into their respective roles. Looking towards the future, Sharma and Booty warn of the required “work to reset the business.”

The memo was published on Xbox Wire, allowing the public to read through Sharma and Booty’s message. “Our platform teams have already shipped more updates in the last 100 days than during the prior year combined,” the two said. Off the heels of the Xbox Games Showcase, where flagship games like Gears of War: E-Day, Fable, and Clockwork Revolution were announced, the Xbox leaders state that it’s “important to have both optimism and realism.”

According to Bloomberg, a part of this reset includes “major job cuts” hitting the company in July. This comes from those familiar with Microsoft’s plans, as in the past, Sharma has made comments about “making hard choices,” as reported by The Verge. It’s currently unclear how significant the layoffs will be or whether they will lead to studio closures. It’s also been reported that Xbox is making cuts to marketing and other areas of the business.

Sharma and Booty both point out the difficulties the company is facing. Within the memo, the two note that this includes the $69 billion USD (around $96 billion CAD) acquisition of Activision Blizzard. “We have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time,” the memo reads. “Going forward, this cannot continue.”

With its Project Helix console in active development, Xbox is also facing a component shortage and inflation of costs. The memo highlights that component costs for the 2027 holiday season, which is the target release of Project Helix, will be “over 5x the prices we paid only two years earlier.” Sharma and Booty state, “We need a new business model and partnerships for hardware as we remain committed to Helix.”