Xbox Plans to Go From 14 Management Layers to Five

Posted on in Management

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In video games, fourteen levels is a respectable campaign. In an org chart, it is a problem. Xbox chief executive Asha Sharma told employees in a memo that, in some parts of the company, work passes through as many as 14 layers of management. Her plan is to cut that to no more than five, and to three where possible.

The structural change is part of a broader and painful reset. Xbox is cutting 3,200 jobs across fiscal year 2027, with about 1,600 roles eliminated immediately and the rest over the year. Sharma was frank about the state of the business, writing that "Our business today is not healthy" and that in a typical year Xbox lost 64 cents for every dollar it invested.

Why layers became the target

According to the memo, platform teams are 40% larger than at the start of the current console generation, even as the player base and playtime have declined. Sharma wrote that this complexity "has slowed decisions, blurred accountability, and made it harder to deliver for players." She also said the organization became more fragmented as headcount grew, with teams operating independently.

The new structure is meant to be flatter and built around three kinds of roles:

  • makers, who build the products;
  • player-coaches, who lead while still doing hands-on work;
  • directly responsible individuals, who own key decisions and outcomes.

One owner for the whole business

Accountability is getting a new address too. For the first time, Xbox is creating a chief operating officer role with end-to-end profit and loss responsibility across content, hardware, platform and services. Helen Chiang has been promoted to the role and will report directly to Sharma. Mojang and King, the largest studios by monthly active players, will also report straight to the CEO. Vendor spending will be cut by 50%, and tools and code bases will be simplified. Sharma promised that Xbox will return to growth in 2027, which, after removing nine layers, should at least reach her desk faster.