{"id":10978,"date":"2026-07-07T09:16:37","date_gmt":"2026-07-07T09:16:37","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=10978"},"modified":"2026-07-07T09:16:37","modified_gmt":"2026-07-07T09:16:37","slug":"microsoft-xbox-layoffs-20-of-staff-to-go-we-didnt-focus-on-the-core-business-ceo-says","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=10978","title":{"rendered":"Microsoft Xbox layoffs: 20% of staff to go. We “didn\u2019t focus on the core business,\u201d CEO says."},"content":{"rendered":"

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Asha Sharma, CEO of Xbox, unveiled the largest restructuring in its history in what she described as a fundamental reset of how Xbox operates and invests, <\/span>Fortune<\/span><\/i>\u2019s Sebastian Herrera reports<\/span>.<\/span><\/p>\n

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It primarily includes layoffs that will affect roughly 3,200 people, or 20% of staff. The cuts are part of a broader workforce reduction at Microsoft announced Monday that is expected to impact about 2% of its 228,000 employees. Xbox is also spinning off four of its studios. \u201cIn order to grow, we made a bunch of bets \u2026 and as we did that, we inherently didn\u2019t focus on the core business,\u201d Sharma told Fortune. \u201cThe number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin.\u201d<\/span><\/p>\n

The unit\u2019s new plan centers on returning focus to its flagship Xbox console, which represents 80% of its business.<\/span><\/p>\n

THE MARKETS<\/h3>\n

Big selloff in Asia leads global stocks downward<\/b><\/h2>\n
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  • S&P 500 futures<\/b> were down 0.21% this morning. The index rose 0.72% yesterday.\u00a0<\/span><\/li>\n
  • In Europe,<\/b> the Stoxx 600 was flat in early trading and the U.K.\u2019s FTSE 100 was up 0.42% before lunch.<\/span><\/li>\n
  • Asia: <\/b>South Korea\u2019s KOSPI was down 4.91%. Japan\u2019s Nikkei 225 was down 2.12%. India\u2019s Nifty 50 was flat. China\u2019s CSI 300 was down 1.03%.\u00a0<\/span><\/li>\n
  • Brent crude<\/b> was $72 per barrel this morning, up from a low of $71 yesterday.<\/span><\/li>\n
  • Bitcoin<\/b> was $63K.<\/span><\/li>\n<\/ul>\n

    \u201cA doom loop of its own making\u201d: Michael Saylor\u2019s Strategy sells bitcoin while hoping it also goes up<\/b><\/h2>\n

    Bitcoin took a sharp dip yesterday<\/b> before regaining ground this morning, after Michael Saylor\u2019s Strategy disclosed it had sold $216 million worth of Bitcoin to shore up its cash position. Strategy holds roughly 4% of all bitcoin, and Saylor had previously said he would never sell.<\/span><\/p>\n

    Chris Beauchamp, chief market analyst at investing and trading platform IG, said Strategy was \u201ccaught in a doom loop of its own making.\u201d\u00a0\u00a0<\/span><\/p>\n

    \u201cWhile the sales are small for now, there is growing concern that the selling will accelerate. Tied at the hip, both in performance terms and in the mind of investors, both bitcoin and Strategy face more grim times ahead,\u201d he said in an email to <\/span>Fortune<\/span><\/i>.\u00a0<\/span><\/p>\n

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    AI<\/h3>\n

    The cost of AI may be holding back growth just as hyperscalers enter a negative cash flow era<\/b><\/h2>\n

    One of the central ironies of the AI business right now is that companies are furiously trying to find ways to replace human workers with bots, even though humans are cheaper to employ. This might have the unintended effect of slowing down AI adoption, as companies realize that the expense of using AI eats into their profits. An early sign that this is happening is the phenomenon of <\/span>companies putting caps and limits<\/span> on how much their employees can spend on AI tokens, the basic cost-unit of AI.<\/span><\/p>\n

    \u201cThe current focus on token optimization is an early warning that AI implementation could be a bumpier, slower road than expected,\u201d <\/span>Apollo Global Management\u2019s Torsten Sl\u00f8k told <\/span>Fortune<\/span><\/i>. Sl\u00f8k believes that AI will eventually create more jobs, not less, in much the same way that the dotcom boom and the smartphone did. But in the meantime, AI evangelists should remember that most companies are not tech companies. You don\u2019t need a large language model to run a hotel or a restaurant. \u201cCompanies will slow their AI spending if they don\u2019t see ROI quickly,\u201d he said.<\/span><\/p>\n

    That has not held back investment into AI, however.<\/b> As this chart from Jim Reid and his colleagues at Deutsche Bank shows, \u201cThe five large U.S. hyperscalers are now spending more on Capex than their combined operating cash flow,\u201d they say.\u00a0<\/span><\/p>\n

    Across the sector, free cash flow at the hyperscalers is now<\/span> negative<\/span><\/i>:<\/span><\/p>\n

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    MORE FROM FORTUNE<\/h3>\n

    I skipped college and founded a company at 18. Several exits later, this is what I learned<\/span> – Eric Francia<\/span><\/p>\n

    \u2018The risks are growing and the resources are shrinking\u2019: Experts blame DOGE cuts for intensifying the Ebola outbreak, which has killed more than 500<\/span> – Sasha Rogelberg<\/span><\/p>\n

    The man who ran Bernie\u2019s campaign says Democrats are still making the same mistakes with Democratic Socialists, and they should laud Mamdani\u2019s win<\/span> – Catherina Gioino<\/span><\/p>\n

    Babylist CEO: The Trump Accounts gold rush is overlooking moms<\/span> – Natalie Gordon<\/span><\/p>\n

    Trump rings opening bell for Trump Accounts as Treasury commits $1.4 billion in seed money<\/span> – Catherina Gioino<\/span><\/p>\n

    SpaceX\u2019s supervoting shares put a decades-old governance debate back in play<\/span> – Jeffrey Sonnenfeld and Steven Tian<\/span><\/p>\n

    The yen is quietly crashing as Japan\u2019s debt crisis bleeds into currency markets, and efforts to halt the slide are \u2018doomed to fail,\u2019 economist says<\/span> – Jason Ma<\/span><\/p>\n

    QUOTE OF THE DAY<\/h3>\n

    How David Senra built the podcast the world\u2019s most powerful CEOs can\u2019t stop listening to<\/h2>\n

    \u201cIf you maintain control and really care about the quality of your product, you wind up with the money anyway. It just takes a little longer.\u201d\u2014Founders host David Senra<\/em><\/p>\n

    CHART OF THE DAY<\/h3>\n

    The top 10% spend as much discretionary income as the bottom 70%<\/b><\/h2>\n

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    Just how rich are The Rich? Bank of America economist Aditya Bhave has an answer. If you look only at discretionary purchases (i.e. not housing, utilities, and healthcare) then it turns out that spending by the richest 10% of households is equivalent to the total spending of the bottom 70% of U.S. households. There\u2019s an obvious level of risk in this: If the rich decided, for some reason, to tighten their belts for a while, it would immediately threaten about 40% of all discretionary spending.\u00a0\u00a0<\/span><\/p>\n

    NUMBER OF THE DAY<\/h3>\n

    7%<\/h2>\n

    The increase in construction labor costs in Pittsburgh, Baltimore, and Dallas is caused by the rush to build AI data centers, according to Mario Iacobacci of Oxford Economics. The national average is just 3.9%. \u201cData centers will account for approximately 2.5% of total US construction put-in-place value in 2026, rising to 4.5% by 2030,\u201d he said in a recent research note. As this chart shows, America is now building more data centers than offices:<\/span><\/p>\n

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    THE FRONT PAGES TODAY<\/h3>\n

    Greek shipping companies made almost $4bn carrying Russian oil in past three years<\/span> – FT<\/span><\/p>\n

    Trump heads to Turkey as NATO is strained by Russian attacks, U.S. impatience<\/span> – CNBC<\/span><\/p>\n

    Iran resumes attacks in Strait of Hormuz, U.S. says<\/span> – Axios<\/span><\/p>\n

    Locals Are Clashing With Scientologists Over the Future of This Florida Downtown<\/span> – WSJ<\/span><\/p>\n

    It\u2019s a Different, More Confident Zelensky Coming to NATO This Year<\/span> – Bloomberg<\/span><\/p>\n

    In NATO\u2019s Next Act, Can Europe Play the Leading Role?<\/span> – NYT<\/span><\/p>\n

    Belgium trolls US with savage two-word message after World Cup knockout<\/span> – NY Post<\/span><\/p>\n

    ONE MORE THING<\/h3>\n

    \u201cIt\u2019s greasy, it\u2019s disgusting, but it\u2019s absolutely glorious\u201d: American junk food is winning the stomachs of foreign soccer fans<\/b><\/h2>\n

    Fans attending the World Cup are gorging themselves on the American foods they can\u2019t get at home\u2014and that means fast-food chains and condiments that lack European footprints. \u201cIt\u2019s greasy, it\u2019s disgusting, but it\u2019s absolutely glorious,\u201d Jack Goodwin, a football fan from London, said about the American food he has tried in Dallas, Boston, New York and Atlanta.<\/span><\/p>\n

    \u201cHave you had Chick-fil-A? It was fantastic and so cheap. The sauces are free! It was remarkable,\u201d said Harrison Murphy, also from London. \u201cI said, \u2018This is my first time, what should I try?\u2019 The woman said, \u2018You\u2019ve got to try the Chick-fil-A sauce.\u2019 My God, was it fantastic.\u201d (It\u2019s worth pointing out that sauce is free in the U.K., too.)<\/span><\/p>\n

    So many World Cup visitors expressed love for ranch dressing, for example, that the TSA issued a light-hearted reminder that tourists should pack bottles of dressing in their checked bags, <\/span>the AP reports<\/span>.<\/span><\/p>\n

    One U.S. culinary tradition endures, however: The absolute refusal of America to learn how to make a cup of tea properly: <\/span>The BBC did a TikTok reel on the subject<\/span>.<\/span><\/p>\n<\/div>\n