Xbox CEO Asha Sharma’s Career Creed Meets a 3,200-Job Cut

Xbox chief executive Asha Sharma says she built her career by mastering whatever job sat in front of her, from taking out trash at a golf course to selling coupon books door to door. On July 6, the job in front of her was cutting 3,200 positions, about 20% of Xbox’s staff, and divesting four studios.

The two moments sit five weeks apart and describe the same executive. Her philosophy centers on excelling at the task directly in front of her. That same logic now drives the largest restructuring in Xbox’s history, arriving as hardware revenue craters and Sony and Nintendo pull further ahead.

Never Chase the Dream Job, Sharma Says

Sharma became Xbox CEO in February without a single day of experience running a video game business. She has said that was never the point.

“I never obsessed on what I wanted to be when I grew up,” Sharma said in a stage interview filmed in Aspen at Fortune’s Brainstorm Tech conference.

“I only obsessed on what I wanted to do, whether it was selling coupon books or putting on concerts so I could raise money, so I could have my lunch money… whether it was being the best at taking out the trash at the park that I worked at, I just tried to obsess on being great at what I was doing, so I can earn the next job,” she said.

Her boss has said something similar. Microsoft chief executive Satya Nadella told LinkedIn in 2023 that early in his career he focused less on his next job and more on the one already in his hands. “I felt the job I was doing there was the most important thing,” Nadella said. “I genuinely felt it. And then of course it helped me get my next job.”

A Career That Zigzagged Through Meta, Instacart and Porch

Sharma was born in 1989 in Racine, Wisconsin. Her parents divorced, and her mother worked at a department store. As a teenager, she worked on a golf course and started at S.C. Johnson at age 17.

She earned a business degree from the Carlson School of Management at the University of Minnesota in 2011. While still a student, she launched and ran a center for at-risk teenagers in Brooklyn Park; the center closed when she left it.

• Joined Microsoft’s marketing department in 2011, then left for home-services startup Porch Group in 2013.
• Became a vice president of product and engineering at Meta, leading the Messenger and Instagram Direct teams.
• Served as chief operating officer of Instacart before returning to Microsoft.
• Rejoined Microsoft in February 2024 as president of the CoreAI product division.
• Named executive vice president and CEO of Xbox on February 20, 2026, succeeding Phil Spencer, a 38-year Microsoft veteran.

The choice surprised industry insiders. It passed over Sarah Bond, Spencer’s second-in-command, and installed an executive whose background was consumer tech and artificial intelligence, not games.

Xbox Hardware Revenue Just Fell for a Third Straight Quarter

Xbox hardware revenue fell 33% year over year in Microsoft’s fiscal third quarter, which ran from January through March. Content and services revenue, the Game Pass and digital-sales bucket, dropped 5%. Total gaming revenue fell 7%, the third straight quarterly decline.

Microsoft’s quarterly filing attributed the decline to a lower volume of consoles sold, not a one-time blip. Sharma has told staff the pressure will not ease soon, since component costs for consoles keep climbing.

Xbox Cuts 3,200 Jobs and Spins Off Four Studios

On July 6, Sharma announced the cuts in a memo to staff. Roughly 1,600 employees lost their jobs immediately; another 1,600 are expected to go over the next year.

The reductions are part of a wider Microsoft layoff affecting about 2% of its 228,000 employees. Xbox is also divesting four studios. King, the maker of Candy Crush, and Mojang, the studio behind Minecraft, will now report directly to Sharma. Helen Chiang, previously corporate vice president for the Minecraft franchise, becomes Xbox’s first chief operating officer, overseeing profit and loss across content, hardware and platform.

We simply spread ourselves too thin.

Sharma told Fortune, describing years of Xbox spending across studio acquisitions, multiplatform releases and cloud infrastructure without a matching return.

State WARN notices tied to the cuts have already surfaced, showing hundreds of job losses at ZeniMax Online Studios, maker of The Elder Scrolls Online, and about 100 cuts at Id Software, the studio behind Doom.

Sharma has said Xbox’s operating margins run three to ten times lower than comparable gaming businesses, despite more than $20 billion spent on content and hardware over five years, excluding the Activision Blizzard deal. Annual revenue over that stretch, she told staff, still fell by nearly half a billion dollars.

Why Is Asha Sharma Facing Backlash Over H-1B Visas?

Viral posts accused Sharma of cutting American jobs while Microsoft kept filing for H-1B visas, the temporary permits that let U.S. employers hire skilled foreign workers, and some posts targeted her Indian heritage directly. Reporting since has found the cuts hit staff across multiple countries, with no evidence tying them to visa hiring.

What is confirmed:

• The July 6 cuts affect employees across multiple countries, not only the United States.
• Microsoft continues filing routine H-1B petitions as part of its normal hiring, separate from this restructuring.

What remains unconfirmed:

• Claims that the layoffs were designed to replace American workers with H-1B visa holders.
• Any direct evidence connecting specific job cuts to visa-based hiring decisions.

The online criticism reignited a long-running debate over skilled immigration in tech, one that has little to do with the specifics of Xbox’s restructuring but has made Sharma its public face.

Employees Question the ‘Listening to Twitter’ Strategy

The doubts aren’t only online. A journalist covering the games trade reported that Xbox staff feel leadership leans too heavily on social media sentiment over internal expertise. “Numerous people I have spoken to at Xbox feel there’s too much listening to Twitter,” he wrote, questioning why the company keeps reinvesting in consoles amid a broader market decline.

One current employee put it more bluntly to The HR Digest: “We went from Phil Spencer, who actually loved games, to someone who treats Xbox like just another P&L to optimize.”

Fans Still Love the Game Pass Price Cut

Not all the reaction has been hostile. Sharma’s most concrete move, cutting Game Pass Ultimate from $29.99 to $22.99 a month, landed as a rare price rollback in an industry used to increases. PC Game Pass fell too, from $16.49 to $13.99.

The tradeoff: Game Pass Ultimate drops from $29.99 to $22.99 a month, but future Call of Duty games will no longer join the service on day one, arriving instead about a year later, during the following holiday season.

Some of that goodwill took months to build. In February, players accused Sharma of using AI to write her social posts. She denied it directly: “And yes, I’m writing my own posts :)”

The goodwill has since compounded. At a FanFest event in Los Angeles, Sharma and Xbox chief content officer Matt Booty gave away free limited-edition consoles to every attendee wearing a fan badge, a moment that went viral. Fortune’s Instagram post of Sharma discussing AI in gaming drew more than 5,000 likes, with the top comment reading, “Hiring her may be the single best thing Microsoft has done.”

A former Meta colleague went further. “What she does have: real curiosity, an absurd amount of drive, and the spine to push hard calls through,” wrote Jean-Marc Denis, Meta’s AI design director and a former Messenger design director. “That’s exactly what Xbox needs.” She has also hinted at new exclusive titles, building on moves like reviving Gears of War: E-Day and previewing fresh software plans at events like Xbox’s Games Showcase, where the company lays out its next software wave.

Sharma Joins the Federal Reserve as Xbox Bets on New Models

The same week as the layoffs, the Federal Reserve named Sharma an adviser to its task force on productivity and jobs, alongside Stanford economist Charles I. Jones and venture capitalist Marc Andreessen. Former Walmart chief executive Doug McMillon will advise a separate task force on data, but Sharma is the only sitting CEO across all five groups.

The task force will study how artificial intelligence affects productivity and employment, feeding findings meant to inform the Federal Reserve’s policy judgments.

Sharma is also testing new business models for Xbox hardware, including buy now, pay later financing to lower the entry price, and pushing the platform further onto mobile and PC. The console still accounts for about 80% of Xbox’s business, by the company’s own account, which is why reaching players elsewhere carries real risk. Xbox has already tested that tension elsewhere, bringing Wo Long: Fallen Dynasty’s Complete Edition to Nintendo’s Switch 2, a wager on reaching players Xbox hardware alone no longer does.

Xbox’s gaming division still generates about 6% of Microsoft’s total revenue, by the company’s own account, and Sharma has promised staff a public update every two weeks. Her next progress report is never more than fourteen days away.