TBPN

XBOX to Cut 3,200 Jobs (But Not Because of AI)

July 6, 2026

Happy Monday.

We’re live on YouTube and 𝕏.

The current thing in tech and business is XBOX announcing that it will lay off 3,200 employees.

Today’s Lineup

Cowboy Space Corp. Founder & CEO Baiju Bhatt at 12:00 PM
Legacy Investing Co-Founder & Managing Partner Daniel English at 12:30 PM
Replit President and Head of AI Michele Catasta at 12:50 PM

Run of ShowFormer XBOX CEO Phil Spencer, XBOX CEO Asha Sharma, and XBOX Chief Content Officer Matt Booty

XBOX to Cut 3,200 Jobs (But Not Because of AI)

Newly appointed XBOX CEO Asha Sharma announced this morning that XBOX will lay off 3,200 staffers by the end of 2027, with 1,600 layoffs taking place today. She posted her email to XBOX employees on 𝕏 — it’s very candid about the operational failures and trajectory of the company.

In her email, she says the business is “not healthy” and lists a bunch of surprisingly bad trends and aspects of the operation: XBOX is operating at margins 3-10x lower than its competitors; it released its latest console to a smaller install base while the cost structure of the console itself was higher; in some parts of the company, work has to pass through as many as 14 layers of management; and “in a typical year, [XBOX] lost 64 cents for every dollar [it] invested.”

In addition to the layoffs, Asha said that XBOX will spin out game studios it’s acquired over the years — Compulsion Games, Double Fine Productions, Ninja Theory, Undead Labs, and Arkane are all getting yeeted, in one way or another, from the company. She also laid out a number of other strategic moves in her email, it’s worth reading in full.

Clip Spotlight: Matt Grimm’s War

Anduril’s Matt Grimm is in a long-running war with “wildcat” secondary markets who have “absolutely zero respect” for founders and investors.

“How many investors in America think they own a chunk of SpaceX when they’re actually funding their ex-roommate’s boyfriend’s coke habit in Miami?”

“The SpaceX IPO will be very interesting. This is going to be a situation where the tide goes out, and there’s going to be a lot of people without trunks on.”

“There was this one situation of someone slinging an offer around that was an SPV into another SPV that was buying a chunk of an early investor’s holdings. There are layers and layers of fees and carries on top of that, at a price per share that was something like 70% above what the last round traded at. It’s just an insane thing. They’re pitching access to a deal they don’t have.”

“There was a recent indictment announced in New York around a case where someone was out slinging Anduril SPVs that did not have access to Anduril, and the guy was just pocketing the cash. He was just indicted and arrested at JFK.”

“This isn’t a blanket comment that all secondaries are bad. They’re not. There’s a category of these people who just have no respect and are basically just fraudsters and hucksters.”

From his appearance on TBPN in January.

Headlines

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XBOX CEO Asha Sharma posts about the company’s recent layoffs and restructuring

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