Microsoft CEO Satya Nadella has termed the ongoing Xbox layoffs and restructuring as “streamlining the team.”
Speaking in an interview with Alex Heath on the Sources podcast, Microsoft CEO Satya Nadella was asked about the state of Xbox as the gaming division undergoes significant changes. Despite the restructuring, he said he remains confident about the company’s gaming business, pointing to its studios, intellectual property portfolio and its ability to produce games going forward.
“I feel fantastic about the IP we have right now,” Nadella said, highlighting Microsoft’s collection of studios and franchises. He described the ongoing process of layoffs and restructuring under Xbox CEO Asha Sharma as “some amount of streamlining.” According to him, the overall objective is to develop a sustainable business model that allows Microsoft to deliver gaming experiences to a larger audience. He mentioned that Microsoft’s goal is to operate both as a major game publisher and as a platform provider across PC and Xbox.
The Microsoft CEO also referenced the company’s expectation that Xbox will return to growth in the next fiscal year, saying that this is the plan being executed by Sharma and her team. He linked that goal to continued investment in producing what he described as high-quality games. His statement comes as Microsoft continues to reshape its gaming operations following its acquisition of Activision Blizzard and broader changes across Xbox. The restructuring has included changes to teams and projects as Microsoft seeks to balance game development, publishing and platform operations.
Nadella’s remarks fit into his overall description of Microsoft’s strategy. Rather than focusing exclusively on traditional Xbox hardware, the company wants its gaming business to reach more players through multiple platforms and publishing opportunities.
Besides gaming, the interview focused on Microsoft’s artificial intelligence strategy, including Copilot, AI agents, the company’s investment in infrastructure, and its approach to supporting multiple AI models.
