Layoffs, strategic changes and silence: the prior signals to Phil Spencer’s goodbye

Old statements and mass firings come back to the center of the debate with the departure of Phil Spencer.

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The departure of Phil Spencer from Microsoft Gaming has shaken the community, but for some, it wasn’t a total surprise. For months, rumors had been circulating about his possible departure, especially after the layoffs and strategic changes that took place in 2025.

On February 20, his retirement was officially confirmed after 38 years at Microsoft, with Asha Sharma taking over the leadership. However, the question on everyone’s mind now is whether this decision had been in the works for a while.

The signs that fueled the rumors about Phil Spencer and Xbox

In July 2025, Microsoft announced a wave of layoffs that affected thousands of employees across the company, including the gaming division. In that context, speculation began to emerge about Spencer’s future, even linking his possible departure to the launch of the next generation of hardware.

At the time, it was assured that there were no immediate plans for his retirement, but just six months later, the departure became official. It’s unclear if there were internal changes between those statements and the final announcement, but the timeline has given rise to new interpretations.

Now, with Asha Sharma at the helm of Microsoft Gaming, the focus shifts to the future of Xbox. The transition marks a turning point for the brand and opens a new era where strategy, identity, and leadership will be under constant scrutiny.