With last week’s Xbox layoffs still fresh in everyone’s minds, there’s been plenty of debate over the past few days about why they happened and what needs to be done to ensure they’re not repeated on such a large scale again.
In Windows Central‘s report about this a few days ago, it was mentioned that “sources” placed the blame on Microsoft CFO Amy Hood, with Windows Central editor Jez Corden mentioning that “Hood’s unrealistic fiscal expectations on Microsoft’s subsequent divisions have created a culture of fear and doubt”.
Corden mentioned this again on social media, highlighting that “unrealistic” financial requirement:
Microsoft CFO Amy Hood has given Xbox an utterly unrealistic financial requirement that is going to continue hurting the division. This isn’t over.— Jez (@JezCorden) July 5, 2025
However, The Verge editor Tom Warren advised that he doesn’t think it’s an unrealistic financial requirement, pointing out that because of acquiring Activision Blizzard and a “Game Pass gamble” that “hasn’t paid off yet”, it’s ultimately “just the reality of the Xbox business” these days.
Here’s a look at some of his exchanges:
I don’t think it’s unrealistic, it’s just the reality of the Xbox business after the ABK acquisition. Without that deal Xbox revenue would be down, and the Game Pass gamble hasn’t paid off yet— Tom Warren (@tomwarren) July 5, 2025
they tried with the Series S. They missed an important generation with the Xbox One and digital libraries, and Game Pass was supposed to counter that. Mix that with game output struggles (Halo Infinite, Starfield, etc) and it’s hard to justify the existing model— Tom Warren (@tomwarren) July 5, 2025
Xbox revenue was down before they made that decision— Tom Warren (@tomwarren) July 5, 2025
Whether the case may be, Windows Central also mentions there’s “sentiment among Microsoft staffers” that “many of the layoffs” revolve around a broadening shift towards AI and a concern that Microsoft could be losing the AI race.
Is that actually a reason behind it? Who knows, but we do know that Microsoft is making a big push with AI right now, so it’s understandable that employees (and former employees) would put two-and-two together.
Microsoft isn’t saying anything publicly about these Xbox layoffs at the moment, so all we can do is listen to reporters and “sources” and make our own minds up. Wherever the truth actually lies, here’s hoping everyone involved has learned some important lessons from last week’s situation.
What are your thoughts on the situation? Let us know down in the comments section below.
[source windowscentral.com]
Fraser is the News Editor at Pure Xbox, where he spends his time reporting on the biggest stories in the world of Xbox and beyond.