Following the announcement of the largest restructuring in Xbox's history, division CEO Asha Sharma revealed details on how the company plans to reorganize its gaming business. In addition to cutting approximately 3,200 employees during the current fiscal year, Microsoft intends to fundamentally change Xbox's management structure.
In a published address titled "Resetting Xbox," Sharma stated that the company will significantly reduce the number of management layers. While there could previously be up to 14 levels of management between game studios and leadership, this number should now not exceed five, with most divisions planning to have only three.
The new organizational model will be built around three key roles: developers, mentor-leaders who continue to participate in product creation, and employees directly responsible for making key decisions. According to Sharma, this will accelerate decision-making, increase team accountability, and make development more efficient.
Additionally, Xbox plans to unify the codebase across projects, expand the use of shared services, and reduce contractor costs by 50%.
According to the head of Xbox, the need for reforms has been long overdue. In recent years, platform teams have grown by approximately 40% compared to the period of the Xbox Series X|S launch, despite a decline in player audience and overall time spent in games.
Another important change will be the appointment of a new Chief Operating Officer. This position will be filled by Helen Chiang, who previously led the development of Xbox Live and Mojang Studios, known for Minecraft.
Chiang will be responsible for the financial results of all key Xbox business areas — content, hardware, platform, and services. She will replace Dave McCarthy, who is retiring after 17 years with the division.
Sharma emphasized that the new management model will allow for more informed investment decisions, analysis of the company's successes and failures, and increased accountability for executives for the final result.