Microsoft CEO Satya Nadella says he feels “fantastic” about Xbox’s intellectual property and praised the streamlining being led by Xbox CEO Asha Sharma. He made the comment days after Microsoft confirmed another 268 Xbox job cuts.
The quote is not Nadella directly celebrating layoffs. It is praise for the restructuring around them. With thousands of Xbox positions included in Microsoft’s 2026 reset, the timing is hard to separate from the people who lost their jobs.
What did Satya Nadella say?
“There’s some amount of streamlining the team is doing, and Asha is doing, which is great to see.”
Nadella also said Microsoft has strong gaming properties, wants a sustainable business across PC and Xbox, and expects the division to return to growth in the next fiscal year. His answer presents the cuts and studio changes as part of a plan to make that growth possible.
How many Xbox jobs have been cut?
Xbox’s September update confirmed 268 eliminated roles across Halo Studios, first-party teams, Xbox Game Studios management, and central groups. Microsoft placed those cuts inside the wider reset announced in July, which outlined roughly 3,200 gaming reductions through fiscal 2027 and included 1,600 immediate cuts at the time.
The latest update also moved Halo development to an Activision team and changed the future of several studios. Our report on the 268 cuts and the next Halo breaks down that structure.
What is Microsoft changing inside Xbox?
Microsoft is combining Playground Games and Turn 10, moving Obsidian under Bethesda, and placing World’s Edge and Rare under Activision. Double Fine and Compulsion Games have returned to independent management, Undead Labs has transitioned away, and Ninja Theory faced a proposed closure after efforts to find a deal failed. Arkane has also entered a consultation process.
This is not a normal round of small adjustments. Xbox is reducing staff, moving teams, selling or separating studios, and concentrating major properties under fewer operating groups.
Can Xbox grow with fewer people?
Microsoft believes it can. Nadella’s argument is that Xbox has valuable games and needs a leaner structure that can produce steady returns across console and PC. The company has set growth as the goal for the next fiscal year.
That claim now depends on what ships and which studios survive the reset. A healthier balance sheet will not answer concerns about lost jobs, canceled projects, or studios pushed out of Microsoft. Xbox can call the process streamlining; players and employees will judge the games, stability, and working conditions left behind.
