Xbox cuts jobs, the Fed hires its CEO to study jobs

On Monday, July 6, Asha Sharma signed the internal memo Xbox employees had been dreading for months. "Our business today is not healthy," the head of the brand wrote, before announcing 1,600 immediate job cuts, the first installment of 3,200 spread over the coming year^[1]. Three days later, the Federal Reserve named her to lead a task force on productivity and jobs^[2]. The calendar has comedic timing I wouldn't wish on anyone.

The biggest restructure in Xbox history

The announcement deserves a closer look, because the numbers are dizzying. Microsoft is cutting 4,800 positions overall, about 2.1% of its workforce, including 1,600 at Xbox right now and another 1,600 by next summer, in what Sharma herself calls "the most significant restructure in Xbox history"^[1:1]. Her memo doesn't sugarcoat much. In a typical year, we learn, the division lost "64 cents for every dollar we invested"^[3]. Four studios are leaving the ship while it turns. Double Fine and Compulsion Games get their independence back, IP tucked under their arms, while Undead Labs and Ninja Theory move to new owners with enough funding to finish their current games, which adds up to roughly 350 people changing employers overnight^[3:1].

If this gives you déjà vu, that's because it is one. Since acquiring Activision Blizzard in late 2023, Microsoft has laid off nearly 1,900 studio employees in January 2024, shut down Tango Gameworks and Arkane Austin that May, let 650 more people go in September, then cut around 9,000 positions in the summer of 2025 while canceling Everwild and Perfect Dark^[4]. At this point, restructuring isn't an event at Xbox. It's a season.

The sharpest detail is that Sharma has only held the job since February. She came from Microsoft's CoreAI division by way of Meta and Instacart, with zero experience in video games, and succeeded Phil Spencer, a fixture of the house for thirty-eight years, promising to "recommit to our core Xbox fans and players" and not to "chase short-term efficiency"^[5]. Five months later, short-term efficiency appears to have caught up with everyone.

A hemorrhage that doesn't spare France

Xbox is, sadly, just the latest chapter in a crisis that has been grinding through the industry for four years. Between 2022 and mid-2025, video games shed some 45,000 jobs worldwide, peaking at nearly 15,650 in 2024 alone^[4:1]. And 2026 had a head start well before Microsoft's announcement, with more than 3,700 cuts already on the books, including a thousand at Epic Games, some 400 at Bungie, and 680 at Ubisoft^[4:2]. The GDC's annual survey puts a human scale on the damage, with one in three American developers reporting a layoff within the past two years^[6]. One in three. In any other cultural industry, we would be talking about a national emergency.

France isn't watching the storm from a deck chair. Ubisoft, the national flagship, closed its 2025-2026 fiscal year with a record loss of a billion and a half euros, launched a restructuring in January that cost about 200 jobs at its Paris headquarters and set off several strikes, then announced in June another 380 layoffs and the closure of its Winnipeg and Belgrade studios, following Halifax and Stockholm^[7]. Behind every line of these balance sheets are the people who make the games we love, the ones we grind for years and the ones we hand to our kids. Forgive me if "streamlining" feels a little light for the occasion.

Meanwhile, in Washington

Which brings us to the irony promised in the title. On Thursday, July 9, Kevin Warsh, the new Federal Reserve chairman, announced five task forces charged with rethinking American monetary policy. One of them, named "Productivity and Jobs," is supposed to assess the economic impact of new technologies, artificial intelligence first among them, and deliver recommendations by the end of the year. Its three co-leads are venture capitalist Marc Andreessen, Stanford economist Charles I. Jones, and one Asha Sharma^[2:1].

So within the same week, the same person eliminated 1,600 jobs and joined the body tasked with thinking about the future of employment, a coincidence Aftermath noted with its customary gentleness^[8]. To be fair, the pick has its own internal logic. Who better to brief the central bank on what new technologies do to employment than an AI executive currently automating and downsizing an entire division? Her dataset is extremely fresh. One just wishes the expertise had come at a price other than 3,200 households.

Now we can only hope this hemorrhage of bad news stops, or at least slows down, because the industry is running out of hands to stanch it. Analysts want to see a cycle nearing its end, and the early 2026 numbers did suggest a slight improvement before Microsoft weighed in^[9]. I'd like to believe them, out of optimism and out of a gamer's plain self-interest. In the meantime, a thought for Monday's 1,600, and for the 1,600 who already know their turn is coming. They won't need a task force to measure the impact of new technologies on employment.