Satya Nadella backs Xbox restructuring after 1,600 layoffs and new studio closures
Satya Nadella said on the Sources Podcast that Xbox streamlining is “great to see” as Microsoft seeks a sustainable gaming business model.
- Multiple reports linked those comments to an Xbox restructuring, following earlier layoffs of 1,600 employees in July and a later round of 268 job cuts.
- Available sources also mention studio closures and possible changes at teams including Ninja Theory, though not every detail is fully confirmed.
What happened
Microsoft CEO Satya Nadella spoke on the Sources Podcast with Alex Heath about Xbox and the company’s broader gaming business. In coverage of that interview, Nadella said the “streamlining” at Xbox is “great to see” and that he feels “fantastic” about Microsoft Gaming’s current IP portfolio.
Those comments came as Xbox was hit again by layoffs and internal reshuffling. According to the provided sources, Microsoft Gaming lost 1,600 jobs in July, while later reporting mentioned another 268 Xbox layoffs. The sources place Nadella’s remarks directly alongside that reorganization.
Nadella also said, according to the articles, that Microsoft needs to find a sustainable business model for gaming in order to bring games to more people. He reportedly added that Microsoft wants to be both a strong publisher and a strong platform company for games on PC and Xbox.
The reporting also mentions studio closures and organizational changes, but the exact list of affected teams varies by source. Ninja Theory is mentioned in some reports as a possible or impending closure, though that is not presented as definitively confirmed across all of the provided material.
Timeline
July 2026 — One source says Microsoft cuts 1,600 jobs within its gaming division.
Later in 2026 — Another report says 268 more Xbox jobs are cut and points to further studio reshuffling.
25 September 2026 — Satya Nadella appears on the Sources Podcast and talks about Xbox, gaming IP, and a sustainable business model.
25–26 September 2026 — Coverage of Nadella’s comments spreads across gaming media and is tied to the ongoing Xbox restructuring.
Background
The sources describe an Xbox division that has been under pressure for some time to find a more sustainable model. Nadella’s comments fit that context: according to the articles, he emphasized both the value of Microsoft’s existing gaming IP and the need for a business model that can bring gaming to a wider audience.
The Sources Podcast episode was not only about gaming. The video title also references Microsoft’s AI strategy and confidence around AI, which gives broader context to the interview. In the video description, Xbox is explicitly linked to the recent layoffs, but the video itself does not provide any additional confirmed details about specific studios or management changes in the supplied information.