Xbox Executive Joins Fed Taskforce to Study AI’s Job and Productivity Impact
The U.S. Federal Reserve has recruited Xbox executive Asha Sharma to join a new internal effort focused on how emerging technologies—explicitly including artificial intelligence—may affect productivity and employment. The initiative is framed as part of a broader “Productivity and Jobs” taskforce, with the central goal of evaluating economic consequences and how policymakers might respond.
Release/platform tracker: Xbox leadership reshuffle and layoffs
Sharma’s Fed appointment arrives shortly after she began reorganizing Xbox’s leadership and operating structure. The company has already begun reducing headcount, with 1,600 employees let go on Monday and an additional 1,600 planned for cuts over the remainder of the current financial year. Four Xbox studios have also departed Microsoft so far, alongside project cancellations and studio staffing reductions that have impacted well-known developers.
Sharma is not new to AI policy discussions—she previously worked at Microsoft’s Core AI group, and she took over as head of Microsoft’s gaming division earlier this year after replacing Phil Spencer. For the taskforce, she is joining Marc Andreessen (co-founder and general partner at Andreessen Horowitz) and Charles I. Jones, a professor of economics at Stanford University who is currently on leave from Anthropic. The lineup blends technologists, investors, and economists as the Fed tries to understand how new tools could reshape work across the economy.
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AI’s relationship to job markets—especially across technical roles—has been a widely studied topic, and Microsoft’s own strategy has leaned heavily into AI capabilities. That context makes Sharma’s early Xbox decision more notable: one of her first moves as the head of the platform was to discontinue Microsoft’s Copilot tool as it related to gaming. Even so, she has said she remains optimistic about AI, pointing to areas like neural rendering as a potential way to improve the look and performance of game graphics.
Sharma did not tie her early Xbox restructuring directly to AI in her “Reset” memo, and AI also did not surface during her presentation of the layoffs earlier this week. Instead, her approach appears aimed at improving profit growth by concentrating on the biggest and most established franchises—such as Halo, Minecraft, Candy Crush, Fallout, and The Elder Scrolls. What happens to smaller or mid-tier Xbox properties is less clear, at least from the information shared publicly so far.
“We know that great technology gets better when it gets simpler, not bigger,” Sharma said in her statement. “Today, in some parts of the company, work passes through as many as 14 layers of management. Our platform teams are 40% larger than they were at the start of this generation, even as our player base and playtime have declined. That complexity has slowed decisions, blurred accountability, and made it harder to deliver for players. As we reset Xbox, we will simplify.”
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She continued by detailing how the internal changes will be carried out: management layers are planned to drop to a maximum of five, and—where feasible—to as few as three. Sharma also described a new structure intended to speed up execution, built around makers (individual contributors focused on building), player-coaches (leaders who stay close to the work while developing their teams), and directly responsible individuals, or DRIs, who own key decisions and outcomes.
On the operational side, Sharma said Microsoft will streamline how teams collaborate through tooling and shared systems. The goal is a cleaner code base, shared services that reduce duplication, and a 50% reduction in vendor spending.
Fed Chairman Kevin Warsh also addressed the taskforce’s purpose, emphasizing the institution’s policy priorities. “The Federal Reserve’s commitment to price stability and maximum employment is unwavering. As is our resolve to pursue our mandate with rigor,” Warsh said. “The U.S. economy has changed significantly over the last generation, and never more so than right now. Each task force will carefully consider whether policymakers’ means and methods, analytical tools and policy approaches can be improved upon. I am honored that the best minds from a range of disciplines have agreed to work with us to sharpen our performance as an institution. The goal is straightforward: to ensure the Fed is best positioned to achieve our objectives in this consequential time.”
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].
