Asha Sharma, the new head of Xbox, said the business is not doing well. It makes less profit than other game companies. Xbox has cut jobs several times since 2024, when Microsoft bought Activision Blizzard for $68.7 billion. The Game Pass service, which allows people to play many games for a monthly fee, has not grown as fast as the company hoped. Microsoft is spending a lot on artificial intelligence, but it says AI is not the reason for these job cuts.

Many tech companies are cutting jobs this year. A study found 52,050 tech job losses in early 2026, which is 40% more than the year before. Some game studios are happy because two will become independent again, and two others have found new owners. Microsoft's shares fell about 1.5% on Monday. Asha Sharma promised to help Xbox grow again by 2027.