Microsoft's Xbox gaming division is preparing for a major round of job cuts at the end of the month as new Xbox CEO Asha Sharma moves to "reset" the unit amid a confluence of negative and worsening pressures, including shrinking revenue, soft hardware sales, plateauing Game Pass momentum, and what management now describes as an ongoing "hardware component crisis."
Bloomberg first reported that Microsoft will announce an upcoming round of layoffs after the company's fiscal year ends on June 30. The report was based on sources familiar with the upcoming restructuring plan, though it did not mention whether AI adoption and efficiency gains are driving the cuts.
In a memo to staff, Xbox CEO Asha Sharma and Matt Booty said the gaming division's first 100 days under new leadership showed early signs of progress.
"Now we start the next 100 days. It is important to have both optimism and realism as we work to reset the business," the executives wrote in the memo titled "Next 100 Days: XBOX Reset."
They continued, "Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue."
The memo outlined Xbox's harsh realities it must navigate to achieve a turnaround strategy:
1. Over 1 billion players choose to play XBOX and our games each year, for a total of 72 billion hours across Console, PC, Mobile, and Streaming (excluding much of China and a few other properties). Our franchises are also among the largest and most beloved globally and are now breaking records in TV and film. Going forward, our competition is attention. There are more great games, TV series, franchises, creators, content formats, apps, etc., than ever before
2. We will end this fiscal year at about a 3% accountability margin, down year-over-year. Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue.
3. We are in a hardware component crisis. When I joined as CEO in February, the price we paid for console storage components was over 2x as high as we paid last fall. These costs have since doubled again. And as we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier. Memory costs have followed a broadly similar trajectory. While the entire industry is facing a components crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half decade. We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix.
4. We expanded our studio system when we needed a pipeline of content to meet multiple strategies across subscription, streaming, and devices. In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content. We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win. At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years.
5. Our current platform infrastructure is not built for the battle ahead. Our systems are overly complex, spanning hundreds of dependencies, which hinders our ability to move fast. We've become too reliant on vendors to operate our systems and must become more self-reliant as an engineering culture to build for the future. We must increase the value we ship to players while decreasing the time it takes to do so. Going forward, we'll evolve and rebuild our stack and look at capabilities across all of XBOX and potential M&A to help us win in hardware, PC, mobile, and streaming.
In February, the CEO told the audience at the Bloomberg Tech conference that she planned on "resetting the business," which was "not in a healthy spot."
How it started vs how it’s going | #XBOXShowcase pic.twitter.com/ntww9Pk0GN
— XBOX (@XBOX) June 7, 2026Xbox and the entire gaming industry have faced mounting headwinds.
TD Securities analyst Doug Creutz pointed out Thursday that mobile gaming remains strong, but console gaming has lost momentum this year:
Industry View: Mobile Had a Really Strong Q1; Tempering Console Expectations
We believe U.S. mobile game spending grew +14% y/y in Q1, comfortably above our expectations, based on reported results at public companies. Note that our model does at least attempt to incorporate the impact of what are rapidly growing DTC businesses across the industry. We expect +10% y/y growth in U.S. mobile game spending for 2026. On the other hand, we previously reduced our 2026 console global software/services spending estimate from +7% y/y to +1% y/y based on (1) the impact of the recent price cut to Xbox Game Pass and (2) the apparent lack of a tentpole title in Nintendo's 2026 slate.
Xbox reaches more than 1 billion players annually across console, PC, mobile, and streaming, but can't generate profits? It may be time for AI and automation to streamline the gaming unit, which likely means layoffs are imminent.
The gaming industry is waiting for the launch of Grand Theft Auto VI later this year to rekindle demand.
Tyler Durden Fri, 06/12/2026 - 06:55By Julianne Geiger of OilPrice.com
Three months into the biggest oil supply disruption in modern history, China appears to have discovered something that should make oil bulls at least a little uncomfortable.
It can get by on less fuel than anyone thought.
China's gasoline and diesel demand has been falling for years as electric vehicles gained market share and economic growth slowed. But the latest drop has surprised even seasoned observers.
According to Reuters, gasoline sales at Sinopec, China's largest refiner and fuel retailer, fell 8% year over year in April, while diesel sales dropped 6%. Goldman Sachs estimates that consumption of gasoline and related products may have fallen by as much as 20%.
China has slashed crude imports since the Iran war began, with May imports plunging 29% to 7.8 million barrels per day—the lowest level in eight years. Until recently, many analysts viewed those cuts primarily as a function of China's enormous oil stockpile and high crude prices.
Now another explanation is emerging: China may simply need less fuel.
Rail travel rose roughly 10% in March and April. Subway ridership continues to climb. Electric taxis are becoming increasingly common. Most notably, EV charging volumes surged 69% from a year earlier to a record high in April, according to the China Charging Alliance.
That shift comes as China's refiners are already grappling with weaker economics. Sinopec cut refining runs earlier this year as Middle Eastern supply disruptions squeezed crude availability, while Beijing has sharply reduced fuel exports to preserve domestic supplies.
The property downturn isn't helping either. Diesel demand from construction, long one of China's most reliable sources of consumption growth, continues to weaken as projects stall and budgets tighten.
The question now is whether the trend sticks.
China's refiners can only draw on inventories for so long. The country still maintains one of the world's largest crude stockpiles, but even a billion barrels eventually run out. At some point, imports will need to recover.
What remains unclear is whether gasoline demand will recover with them.
For decades, China's economic growth was one of the oil market's most dependable bullish arguments. Today’s reports may have some rethinking the strength of that argument.
Tyler Durden Fri, 06/12/2026 - 06:30