"Xbox is not for sale," Microsoft gaming CEO Asha Sharma told the New York Times on Wednesday, pushing back against months of speculation that the company is preparing to divest its gaming division. The statement comes as Xbox moves through what Sharma has internally called "the most significant restructure in Xbox history," with 1,600 employees already laid off and a further 1,600 cuts expected before the end of the calendar year.

Sharma, who took over the gaming division from Phil Spencer in February after serving as president of Microsoft's CoreAI group, framed the position bluntly. "Xbox is not for sale," she said. "We will do whatever it takes to set the company up for success, and we will look at the right partnerships, the right operating model, and everything needed to achieve that."

Where do the spin-off rumors come from?

The pushback follows a June report from The Information, which cited three people with direct knowledge and said Microsoft had not ruled out spinning out or restructuring Xbox as a wholly-owned subsidiary, or creating a joint venture with partners. The Information framed such a move as a way to make a future sale easier. Sharma's comments contradict the sale scenario but stop short of ruling out the restructuring path.

Microsoft has run a comparable arrangement since 2016 with LinkedIn, which the company owns but operates independently as a subsidiary. Sharma did not address the LinkedIn parallel directly, but her reference to "the right operating model" leaves that door open.

What does the restructure actually involve?

The numbers are stark. By July, Xbox had cut 1,600 positions, with a further 1,600 reductions expected later this year. Sharma told staff the division was losing "64 cents for every dollar [Xbox] invested," a figure that, if accurate across the unit, explains the urgency behind the cuts. Several studios have closed since the announcement, though Microsoft has not published a full studio-by-studio breakdown.

• 1,600 layoffs completed by July
• 1,600 additional layoffs expected before year-end
• 64-cent operating loss per revenue dollar (company figure)
• Multiple studio closures tied to the restructuring

The "most significant restructure in Xbox history" framing, drawn from Sharma's note to staff, signals that Xbox management is treating the cuts as a reset rather than a routine downsizing.

What does Sharma's strategy actually look like?

Beyond the cost action, Sharma offered little new operational detail. On Xbox's competitive position, she returned to language she has used in prior communications: "All I can do is look at it from a first principles perspective," she told the NYT. "And I think the industry will require disruption."

That phrasing will leave studios, partners, and platform holders parsing for specifics. Sharma announced no new hardware, content investments, monetization changes, or third-party partnership terms in the interview. She added that "we've got a long way to go with Microsoft, and we're going to take the long-term view," reinforcing the multi-year horizon for any recovery.

What is worth watching next?

Two signals will determine whether Sharma's "not for sale" line holds. The first is whether Microsoft formally redesignates Xbox as a subsidiary along LinkedIn-style lines, a move that would preserve ownership while loosening operational ties. The second is the timing and granularity of the second wave of layoffs expected by year-end, and whether the cost cuts stabilize the 64-cent-per-dollar loss metric Sharma cited. The partnership and operating-model review she referenced has no public timeline; that gap is now the most concrete thing to watch.