A Bloomberg report has claimed that Microsoft is set to make a number of significant layoffs at its Xbox division next month, following the end of the format holder’s financial year on June 30.
In addition, the Xbox console maker is planning cuts to its marketing budget and other key business sections, the report added. The planned cuts following the appearance of Asha Sharma, the newly-appointed head of Xbox, at the Bloomberg Tech conference this weekend, where the executive revealed she is planning on “resetting the business,” which is currently “not in a healthy spot.”
Furthermore, Sharma revealed in an email to employees yesterday — which was seen by Bloomberg and published on Xbox Wire — that the Xbox business had suffered a decline to a 3% “accountability margin.”
“Excluding Activision Blizzard King, over the past five years, 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,” said Sharma. “Going forward, this cannot continue.”
We expanded our studio system when we needed a pipeline of content to meet multiple strategies across subscription, streaming and devices. In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content. We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win.
Microsoft has already made some major changes in regards to its software output recently, announcing Gears of War E-Day is a console exclusive alongside Clockwork Revolution. Despite this, other upcoming first-party titles such as Halo: Campaign Evolved and Fable are still coming to Sony’s console.