Microsoft recently announced mass layoffs affecting 4,800 people, including 3,200 at Xbox, and now US Senator Bernie Sanders (D-VT) has ripped the technology giant for cutting staff at a time when it’s making massive profits.
Posting on social media, Sanders pointed out how Microsoft made more than $100 billion in profit in 2025, with CEO Satya Nadella getting paid $96 million. He also called out how US President Donald Trump’s new tax plan would save Microsoft $12.5 billion.
“Please don’t tell me corporate tax breaks create jobs. It never trickles down,” he said, calling out the Xbox layoffs and the Xbox console price hikes. The latest Xbox console price hike brings the Series X up to a whopping $800.
For the fiscal year that Sanders is referring to, Microsoft made $101.8 billion in profit (up 16%) on revenue of $281.7 billion (up 15%). Microsoft overall may have done well financially during the year, but Xbox was in a rougher spot, if commentary from Xbox CEO Asha Sharma is to be believed.
She has said the Xbox business is “not healthy” and that a variety of bets made by previous leaders Phil Spencer and Sarah Bond did not pay off. That’s left Sharma in a position where Xbox’s operating margins are 3-10x lower than what she said were “comparable platform and publishing businesses.”
Sharma said Xbox was operating as a business with 3% margins, which means for every $100 made, the company spends $97 and keeps $3. A business operating at that margin level could be fine, but Microsoft’s other business units have 40%+ profit margins.
Microsoft’s stock price is down 19% so far this year and more than 22% over the past year. In fact, June 2026 was the worst month for Microsoft’s stock price since December 2000.
Some of the bets that Xbox made that did not pay off as Microsoft envisioned included Xbox Game Pass, releasing games on rival systems, and buying up studios, Sharma said. For Game Pass, a recent report said some Xbox employees worried that the plan to launch new games into the service was not actually a smart move, but management proceeded anyway.
In addition to mass layoffs, Xbox is divesting of five studios. Double Fine and Compulsion are regaining their independence, while Ninja Theory and Undead Labs are being sold. Arkane Lyon is in the “consultation” process to determine its fate and the fate of the studio’s upcoming game, Marvel’s Blade.
Image credit: Bernie Sanders YouTube