CEO Asha Sharma officially dismissed speculation regarding the potential sale of the Xbox division. She emphasized that the company is currently focused on establishing a sustainable operating model and exploring strategic partnerships to ensure long-term success.
The current strategy involves a comprehensive restructuring of the gaming unit, which Sharma initiated in June. This plan includes a significant reduction in workforce, with up to 3,200 employees expected to be laid off by the end of the 2027 fiscal year in June.
Microsoft leadership, including CEO Satya Nadella and CFO Amy Hood, has shifted focus toward this internal reset rather than a divestiture. Nadella publicly expressed support for these streamlining efforts during a recent podcast appearance.
Operational changes include moving major titles like Halo under Activision, alongside developers of Sea of Thieves and Age of Empires. The company is actively reducing management layers and offloading smaller studios to prioritize larger franchises.
These structural adjustments aim to transform Xbox into a wholly owned subsidiary, similar to the model used for LinkedIn. While future divestment remains a possibility, the current management objective is to restore growth within the division.
