In February 2026, Asha Sharma was appointed as the new leader of the Xbox division, taking over from Phil Spencer. Shortly after her appointment, she brought several colleagues from Microsoft's CoreAI team, including Jared Palmer, who became the Xbox VP of engineering. Palmer's role was focused on developing tools and infrastructure to enhance productivity for developers. However, just three months into his position, Palmer announced his departure from Xbox to join Cognition, an AI startup, where he will lead engineering efforts. His exit comes during a challenging period for Xbox, marked by significant layoffs and restructuring under Sharma's leadership. The Xbox division is currently undergoing a major reset, with Sharma implementing a plan that includes laying off 1,600 employees across various studios, with an additional 1,600 layoffs expected in the following fiscal year. This restructuring is part of a broader strategy to streamline operations and refocus the division's efforts. The layoffs and studio closures have raised concerns about the future of Xbox, particularly regarding the development of its next-generation console, Project Helix. The timing of Palmer's departure is notable, as it coincides with these significant changes within the company. Palmer's brief tenure at Xbox has raised questions about the reasons behind his departure. While it is unclear if his decision was influenced by the ongoing turmoil at Xbox, it appears that his move to Cognition may be driven by the opportunity to work in a growing field of AI technology. His previous experience in building developer tools aligns with Cognition's focus, suggesting that he is seeking to leverage his skills in a new environment. The transition from a major corporation like Microsoft to a startup can often present both challenges and opportunities for professionals in the tech industry. As the Xbox division navigates through this tumultuous period, the impact of leadership changes and employee departures will likely shape its future direction. The ongoing layoffs and restructuring efforts may affect the morale of remaining employees and the overall stability of the division. With the gaming industry constantly evolving, the decisions made by Asha Sharma and her team will be crucial in determining Xbox's competitive position in the market moving forward.