Xbox CEO Reveals Some Studios Had Up to 14 Layers of Management Before Major Restructuring

Xbox CEO Asha Sharma has revealed that some of the company's first-party studios were operating with as many as 14 layers of management before the recent restructuring. Speaking about the changes, Sharma said the complicated corporate structure slowed decision-making, reduced accountability, and made it harder for development teams to work efficiently. The comments come as Xbox continues implementing what the company describes as the largest organizational overhaul in its history.

According to Sharma, Xbox plans to reduce management levels to five or fewer across the organization. The executive explained that simplifying the reporting structure will help studios communicate more directly, speed up production, and allow developers to spend less time navigating internal bureaucracy. She also noted that parts of the platform organization had grown significantly over the past several years despite slower business growth.

The restructuring follows a broader strategic shift at Xbox, which includes workforce reductions and a renewed focus on the company's core gaming business. Sharma said Microsoft expanded aggressively in recent years but eventually realized that such rapid growth created unnecessary complexity. The new strategy aims to build a leaner organization capable of responding more quickly to industry changes while supporting the studios responsible for Xbox's biggest franchises.

Although the transition has been difficult, Xbox believes a flatter management structure will improve collaboration and help development teams deliver games more efficiently. Whether these internal changes lead to stronger first-party releases remains to be seen, but the company has made it clear that streamlining operations is now a key part of its long-term strategy.