Redmond: Microsoft has laid off Xbox veteran Kevin LaChapelle after a remarkable 37-year career with the company as part of a major restructuring that will eliminate around 3,200 jobs across its Xbox gaming division by 2027. The latest cuts are part of a broader workforce reduction affecting nearly 4,800 employees across Microsoft as the technology giant looks to streamline operations and improve profitability in its gaming business.
LaChapelle, who served as Vice President and General Manager for Xbox Cloud Gaming (xCloud), was one of the company’s longest-serving executives. His departure has drawn attention because of his significant contributions to Xbox, particularly in leading the team behind the popular Xbox Backward Compatibility programme, a feature widely praised by gamers for allowing older Xbox titles to be played on newer consoles.
Announcing his departure on LinkedIn, LaChapelle wrote, “I will add my name to the list of people who were laid off today at Xbox.”
Reflecting on one of the defining moments of his career, he recalled the unveiling of the Backward Compatibility programme at E3 2015.
“Sitting in the auditorium when Phil announced the programme at E3 2015 was incredible. The audience’s reaction was unbelievable.”
LaChapelle joined Microsoft in 1989 as a software design engineer and worked across multiple divisions before becoming one of the key leaders in Xbox’s cloud gaming initiatives.
Wider Xbox restructuring
The layoffs form part of Microsoft’s largest restructuring of its Xbox business to date. The company is eliminating approximately 1,600 Xbox roles immediately, with another 1,600 positions expected to be cut by July 2027.
According to Xbox CEO Asha Sharma, the restructuring is aimed at simplifying the organisation after years of heavy investment in Game Pass, cloud gaming, multi-platform publishing and studio acquisitions that have not delivered the expected pace of growth.
The restructuring has also affected several Xbox studios and support teams. Bethesda Game Studios confirmed that numerous developers, programmers, artists, designers and quality assurance professionals have lost their jobs. Corporate Vice President of Product Services Dave McCarthy is also leaving the company after eight years.
Focus shifts to profitability
Microsoft has stated that the reorganisation is intended to create a leaner operating structure while improving long-term returns from its gaming business. Although the company continues to invest in cloud gaming, Game Pass and first-party content, it is reducing management layers and reshaping its operations to adapt to changing market conditions.
LaChapelle’s departure marks the end of an era for Xbox, with one of the architects of one of its most celebrated consumer features leaving the company during its most significant transformation in decades.