Microsoft CEO Satya Nadella Calls Xbox’s Layoffs “Streamlining” as 2026 Job Cuts Near 1,900
Microsoft CEO Satya Nadella has weighed in on Xbox’s ongoing wave of layoffs, calling the restructuring effort led by Xbox CEO Asha Sharma “streamlining” that he’s glad to see. The comments came during a September 25 interview on the Sources podcast with Alex Heath, just days after Age of Empires studio World’s Edge became the latest casualty of the same cost-cutting plan.
“Streamlining… Which Is Great to See”
Asked about the cuts, Nadella said: “There’s some amount of streamlining the team is doing, which is great to see.” The remark came during a wide-ranging conversation that also covered Microsoft’s Copilot and AI strategy, with Xbox’s restructuring making up just one segment of the interview rather than its main focus.
Confidence in the Games, an Unfinished Business Model
Nadella struck an optimistic note about Xbox’s first-party lineup, pointing to the studios and IP Microsoft still has as reasons for confidence in future releases. At the same time, he acknowledged the company hasn’t fully settled how gaming fits into its wider plans, saying Microsoft still needs to land on a sustainable business model that lets it bring games to more and more people, across both PC and Xbox.
Satya Nadella addressed Xbox’s restructuring during a September 25 interview on the Sources podcast.
The Numbers Behind Xbox’s Reset
Sharma’s restructuring plan, first laid out in July, initially covered around 1,600 layoffs against a stated target of cutting roughly 3,200 roles, about a fifth of the division, by the end of the fiscal year. A September 22 round added 268 more cuts, handed the next mainline Halo game to Activision, and pushed Hellblade developer Ninja Theory toward a proposed closure. Two days after that, Age of Empires studio World’s Edge lost roughly half its staff in a follow-up round tied to the same plan. Altogether, that puts Xbox’s confirmed 2026 job cuts at somewhere around 1,900, with well over 1,000 more expected before the fiscal year is out.
Whether Nadella’s confidence in Xbox’s game lineup translates into stability for the studios still standing remains to be seen, but for now, Sharma’s “reset” shows no signs of slowing down.
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