Nadella Backs Xbox Layoffs, Promises Growth Next Fiscal Year

Ever wonder what Microsoft's boss really thinks about all those Xbox layoffs? Turns out he's a fan.

In the wake of two rounds of Xbox layoffs, Microsoft CEO Satya Nadella has publicly praised the cuts, calling the remaining studios and IP lineup "fantastic" and describing the recent streamlining measures as "appreciated." It's his first public comments since the layoffs began.

Speaking on the Sources Podcast, Nadella reiterated the goals of new Xbox CEO Asha Sharma: focus on the biggest games, explore new business models, and get the gaming business back on a growth track. "Looking at our existing studios, IP, and ability to make great games, I feel great," Nadella said. "Asha and the team are doing some streamlining work, which is good. Next we have to find the right and sustainable... way to let more players experience our games."

He added that Sharma and her team have said Xbox will return to growth in the next fiscal year, and that they're executing that plan while continuing to build great games. That's a bold promise given the context: Xbox posted a rough financial year, and back in June, Nadella himself publicly criticized Xbox for making less money from gaming than YouTube.

Since July, two waves of layoffs have hit Microsoft's studios hard. Nearly 2,000 people have been cut, and multiple studios have been closed or moved. Obsidian, for example, was folded into Bethesda. Halo's studio was significantly reduced, with the IP handed to Activision for development. Ninja Theory, the studio behind Hellblade, was shut down. Double Fine, Compulsion Games, and Undead Labs have fully left Microsoft, while Arkane is still looking for a buyer.

So what does this mean for you? If you're an Xbox fan, the message is clear: fewer studios, fewer teams, but a sharper focus on the biggest hits. Whether that actually translates to growth next fiscal year is the million-dollar question.

What do you think of Nadella's comments? Will you be sticking with Xbox through this shake-up?