Microsoft (MS) has carried out a sweeping reshuffle of management at its underperforming Xbox division.

CNBC reported on May 5 that Xbox Chief Executive Officer Asha Sharma (아샤 샤르마) announced a new leadership lineup in an internal memo and said she would put the gaming business back on a growth track.

A key part of the reshuffle is the forward deployment of staff from the CoreAI organisation. Sharma moved to Xbox after Phil Spencer announced his retirement in February. She joined Microsoft in 2024 after working at Meta and Instacart, and served as corporate vice president for product at the CoreAI engineering group, which oversees developer tools such as GitHub Copilot and Visual Studio Code.

In the memo, Sharma said, "We need to change the way we work and our organisational structure overall." She said, "In the current state, it is difficult to deliver meaningful results quickly." She added, "We are spending too much time internally rather than on the community, and in some foundational areas we lack deep understanding."

The reorganisation comes as Xbox struggles. Microsoft posted its fourth decline in gaming revenue in the past six quarters last week. Microsoft CEO Satya Nadella (사티아 나델라) said he is focusing on winning back fandom for consumer businesses such as Xbox and Bing.

Xbox is also falling behind in hardware competition. VGChartz data showed that first-quarter sales of Nintendo Switch, Switch 2 and Sony PlayStation 5 (PS5) exceeded those of Xbox Series X and Series S. Against that backdrop, Sharma personally announced a cut in the subscription fee for Game Pass in April, offering access to hundreds of games, as she sought to broaden user touchpoints.

Sharma also made clear the direction for new appointments. She said, "We are bringing in new leaders with consumer and technical expertise that Xbox still does not sufficiently have." The 4 new leaders are from the CoreAI group that worked with Sharma.

Subscriptions and cloud are also being reorganised separately. David Schloss (데이비드 슐로스), who was a product and growth executive at Instacart, will oversee Xbox's subscription and cloud businesses. As hardware sales slow, Game Pass and cloud have become core pillars for a business rebound.

Some existing key executives will step down. Kevin Gammill (케빈 개밀), who has overseen Xbox user experience, game development and the publishing platform, will leave the company. Roanne Sones (로앤 손스), who has been responsible for Xbox devices and the ecosystem, will go on leave after this summer and then move into an advisory role. Sones and Gammill have each worked at Microsoft for 24 years.

The shake-up is seen as a signal that Xbox aims to go beyond personnel moves and also fix product development speed, user touchpoints, and how it runs subscriptions and cloud. As Microsoft pushes a rebound across its consumer businesses, it appears to be moving first at Xbox to restore organisational execution.