A new report indicates that XBOX is preparing for major layoffs next month. According to Bloomberg’s Jason Schreier, sources indicate the layoffs are part of CEO Asha Sharma’s plans to lower the revenue losses affecting the division. No further details, such as how many employees it will impact, have been revealed. The layoffs are allegedly slated to take place shortly after the fiscal quarter ends on June 30th.
The report also indicates that the XBOX division’s budget will be cut. This means spending on marketing and “some other areas of the business” will be going down, according to sources. XBOX itself hasn’t offered any comment on the matter.
In a recent post about major “realities” that the dvision is facing, Sharma and chief content officer Matt Booty had mentioned the loss of revenue. They also brought up the fact that the fiscal year will be ending with XBOX’s revenue having gone down by 3 percent year-on-year. The duo said that, “Going forward, this cannot continue.”
“We will end this fiscal year at about a 3 percent accountability margin, down year-over-year,” they wrote. “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. Going forward, this cannot continue.”
This report comes just a few weeks after an internal memo was reportedly sent out by Sharma to XBOX staff, where she spoke about getting XBOX ready for the future with stronger foundations. However, part of these plans included “making hard choices”.
“We are building a stronger XBOX,” Sharma reportedly said in the memo. “That means making hard choices about what we build, where we invest, and what kind of company we need to be going forward. That is part of what you are starting to see in the shift from Xbox to XBOX. It reflects a decision to be deliberate in how we show up for the players who care most about this brand.”
More recently, speaking on the subject of console-exclusive releases, Sharma had acknowledged that XBOX’s business isn’t quite healthy right now. She said that the company was simply dipping its toes in the water to see if exclusive releases can pay off. To do this, the company had decided to only go with 1 or 2 “signature exclusives”. In the future, once the business gets healthier, Sharma said that the company wants to potentially do more.
“Look, I think that we are the number two publisher in the world, and when you do that, you want your games to be everywhere,” she said. “You’re stronger when the world plays with you. At the same time, we’re increasingly becoming more of a platform, and it’s hard to find examples of platforms out there that don’t have exclusive services and content.”
“And so, this is a journey for us. Our business isn’t particularly healthy. So, we’re starting by introducing 1-2 signature exclusives. As the business gets healthy, we will look to try and do more.”
