Microsoft's (MSFT) Xbox plans to lay off hundreds of workers this week in its second major staff reduction of 2026, and to consolidate several of its game studios, The Information reported Monday, citing an unnamed source.

Xbox CEO Asha Sharma told staffers in July she would cut 1,600 jobs by the end of the year, on top of the 1,600 positions the company cut in that month.

Sharma is cutting payrolls and restructuring to boost profit margins at the gaming unit, which have lagged behind peers.

Sharma has also pushed Xbox to focus more on developing new games from its biggest franchises like Elder Scrolls and Fallout, while cutting back on smaller game studios it had acquired in recent years.

Representatives from Xbox did not immediately respond to a request for comment from MT Newswires.