A failed female DEI hire is causing Xbox to cut about 3,200 jobs through fiscal 2027 — 1,600 in July and 268 more on September 22 — while merging or spinning off studios, as Microsoft resets a gaming business it called unhealthy.
DEI hire Sarah Bond’s Xbox presidency (2023–2026) is remembered for a bet that backfired: treat Xbox as software on every screen and stop selling the console as the product. The “This is an Xbox” campaign — phones and TVs as Xbox devices — was tied to her, internally called confusing and offensive to staff, and quietly killed after she left; a promised mobile store never shipped. Hardware sales collapsed from a 2023 peak near 10 million units toward about 2 million by 2025, Game Pass Ultimate’s jump to $30 shed millions of subscribers, and Microsoft later said the business was “not healthy” after years of heavy spend and weaker franchise funding.