Xbox is bracing for a painful summer. Speculation among Microsoft Gaming employees points to significant workforce reductions coming in July, just months after new CEO Asha Sharma took the reins and began reshaping the division’s leadership and strategic direction.
Sharma, who was appointed Executive Vice President and CEO of Microsoft Gaming on February 23, 2026, has moved quickly to signal that the status quo is over. In internal communications issued in April and May, she told staff the gaming division would need to make “hard choices” and “tough decisions” to revitalize growth.
A new regime takes shape
Sharma’s arrival marks the first major leadership change at Xbox in several years. She replaced Phil Spencer, the long-tenured executive who became the public face of the Xbox brand. Spencer retired from the role, handing Sharma a division that has struggled with persistent challenges around revenue growth and profitability.
One of Sharma’s first moves was a leadership overhaul. She brought in several executives from her previous role at Microsoft’s CoreAI division, effectively installing a new inner circle with experience in a different part of the company’s business.
