What Xbox CEO told staff in first townhall since layoffs at Microsoft's gaming unit

Xbox CEO Asha Sharma has reportedly addressed company staff in her first company-wide town hall since sweeping summer layoffs hit Microsoft’s gaming division, laying out a comprehensive roadmap to stabilise the brand, committing to traditional console players and preparing for next-generation hardware. Citing a transcript of an internal gathering that followed a turbulent stretch marked by hundreds of job cuts, studio divestments and internal closures, a report by Windows Central says that Sharma acknowledged that Xbox entered 2026 facing severe headwinds, with user engagement hours, active player counts and top-line revenue all sliding downward.She pointed out that the division’s prior subscription approach, which previously led to removing Call of Duty from standard tiers alongside major price cuts, pushed Xbox’s balance sheet into what she termed a “freefall.” Now Sharma has stated that player hours have steadied, while first-party publishing output has bounced back:“Why do we exist?