Xbox CEO Joins Fed AI Jobs Task Force Days After Announcing 3,200 Layoffs

Days after announcing the largest restructuring in Xbox history, CEO Asha Sharma has joined a Federal Reserve task force examining how artificial intelligence and other emerging technologies could reshape jobs, productivity, and the broader economy.

On Thursday, the Federal Reserve said that Sharma will serve on its Productivity and Jobs task force, which will study the economic impact of new general-purpose technologies, including AI, as part of the central bank’s approach to monetary policy.

Sharma, who previously worked in Microsoft’s Core AI group before taking over Xbox, joins Marc Andreessen, co-founder and general partner at Andreessen Horowitz, and Charles I. Jones, a Stanford University economics professor currently on leave at Anthropic.

“The U.S. economy has changed significantly over the last generation, and never more so than right now,” Federal Reserve Chairman Kevin Warsh said. “Each task force will carefully consider whether policymakers’ means and methods, analytical tools and policy approaches can be improved upon.”

According to the Fed, the five task forces will bring together outside experts in economics, business, and central banking to review how the central bank approaches monetary policy. In addition to productivity and jobs, the groups will examine Fed communications, balance sheet policy, economic data, and inflation frameworks.

The appointment comes as Sharma oversees what she called the “most significant restructure in Xbox history,” with plans to reduce the division’s workforce by approximately 3,200 employees through FY27. The cuts begin with 1,600 role eliminations, while four studios will leave Xbox for new management.

In a letter to employees earlier this week, Sharma said Xbox’s business was “not healthy,” citing lower margins than comparable platform and publishing businesses, a smaller Gen 9 console install base, and higher costs.

“I know this is painful. These changes will directly affect people who have poured their creativity into building XBOX,” she wrote. “Many joined us through acquisitions, while others were recruited here, or sought us out because they loved this industry and loved XBOX. Today’s decisions do not reflect their talent or dedication.”

Sharma said Xbox’s investments in Game Pass, multi-platform releases, and a broader content portfolio created value but did not grow as quickly as expected. As the business expanded, she said Xbox added more teams and investment while its core business weakened.

“We must reset Xbox,” Sharma wrote.

Sharma’s appointment comes amid growing scrutiny over how AI is reshaping the workforce as tech companies invest heavily in automation while restructuring teams. In April, Snap cut roughly 1,000 jobs, roughly 16% of its staff, as it increased its focus on AI-powered tools, while Meta has also said it would reduce headcount by 10%, around 8,000 jobs, as CEO Mark Zuckerberg pushes the company deeper into artificial intelligence.

In June, California launched an AI unemployment tracker to monitor whether automation is contributing to job losses, while a Federal Reserve study earlier this year found U.S. programming job growth slowed significantly following the launch of ChatGPT, estimating that roughly 500,000 developer jobs that would have otherwise existed were never filled.