Days after announcing the most significant 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. The appointment, revealed Thursday, places Sharma on the central bank's Productivity and Jobs task force, which will study the economic impact of new general-purpose technologies—including AI—as part of the Fed's monetary policy review.
Sharma, who previously worked in Microsoft's Core AI group before taking over Xbox, will serve alongside prominent figures such as 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 task force is one of five created by the Federal Reserve to reevaluate its approach to monetary policy. According to Fed Chairman Kevin Warsh, the groups will examine Fed communications, balance sheet policy, economic data, inflation frameworks, and—in Sharma's group—productivity and jobs.
“The U.S. economy has changed significantly over the last generation, and never more so than right now,” Warsh said in a statement. “Each task force will carefully consider whether policymakers' means and methods, analytical tools and policy approaches can be improved upon.” The move signals the central bank's recognition that AI and automation are rapidly transforming labor markets and economic output, a topic of intense debate among economists, technologists, and policymakers.
Sharma's appointment comes at a tumultuous time for Xbox. Earlier this week, she announced plans to eliminate approximately 3,200 roles across the division through fiscal year 2027, starting with 1,600 immediate job cuts, while four studios will leave Xbox for new management. In a letter to employees, Sharma described the move as the “most significant restructure in Xbox history,” citing poor financial health. “Our business is not healthy,” she wrote. “Lower margins than comparable platform and publishing businesses, a smaller Gen 9 console install base, and higher costs have forced us to reset.”
She acknowledged the human toll: “I know this is painful. These changes will directly affect people who have poured their creativity into building XBOX. 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.” The restructuring follows years of aggressive expansion under Microsoft's gaming division, including the $69 billion acquisition of Activision Blizzard, which closed in 2023. Despite record revenues driven by Game Pass subscriptions and multi-platform releases, Sharma noted that investments did not grow as quickly as expected, and the core business weakened as the team expanded.
Sharma's dual narrative—leading layoffs while advising on AI-driven productivity—highlights a broader tension within the technology industry. Companies are investing heavily in automation, machine learning, and generative AI tools, even as they reduce human headcount. In April, Snap cut roughly 1,000 jobs (16% of its staff) to focus on AI-powered features. Meta has similarly announced plans to reduce headcount by 10%—around 8,000 jobs—as CEO Mark Zuckerberg pivots toward artificial intelligence. The Federal Reserve study itself, released earlier this year, found that U.S. programming job growth slowed significantly after the launch of ChatGPT, estimating that roughly 500,000 developer positions that would have otherwise materialized were never filled. California launched an AI unemployment tracker in June to monitor whether automation is contributing to job losses.
Sharma's background at Microsoft's Core AI group makes her a fitting choice for the task force. She brings firsthand experience in both building AI systems and managing the human consequences of technological disruption. Her role at Xbox involves overseeing a massive ecosystem of hardware, software, and services that employ tens of thousands of people globally. The trade-offs between efficiency, innovation, and employment are central to her daily decisions. As the Fed examines how AI affects productivity and jobs, Sharma's perspective as a corporate leader navigating those trade-offs will be invaluable.
The Productivity and Jobs task force will likely explore a range of questions: How do general-purpose technologies like AI affect labor demand? Do they create new roles faster than they eliminate old ones? How should monetary policymakers adapt to structural changes in the workforce? The group's findings could influence how the Federal Reserve sets interest rates and other policy tools. For instance, if AI leads to sustained productivity gains without inflationary pressure, the Fed might adjust its models for potential GDP and the natural rate of unemployment. Conversely, if automation leads to mass displacement, the Fed may need to consider labor market slack differently.
Sharma's involvement also reflects a broader trend of tech executives moving into policy advisory roles. Marc Andreessen, whose venture capital firm has invested heavily in AI startups, co-founded Netscape and has long been a voice in tech policy debates. Charles I. Jones is a prominent macroeconomist who has written extensively on innovation and growth. His current leave at Anthropic, an AI safety company, further ties the group to cutting-edge AI research.
For Xbox, the restructuring marks a pivot toward efficiency and focus. Sharma said investments in Game Pass, multi-platform releases, and a broader content portfolio created value but did not grow as expected. The company will now concentrate on fewer, higher-impact projects, while the studios being transferred will operate under new ownership. “We must reset Xbox,” she wrote. The layoffs are part of a wider trend in the gaming industry, which has seen thousands of job cuts in 2024—including at Sony, Riot Games, and Electronic Arts—as companies reassess after a pandemic-era boom.
As the Fed task force begins its work, Sharma's participation ensures that the voice of a major employer facing direct AI-driven disruption will be heard. The central bank's willingness to engage with outside experts from business and technology suggests a recognition that monetary policy cannot remain isolated from rapid technological change. The outcomes of these task forces could shape how the Fed approaches everything from interest rate decisions to communication strategies. For now, Sharma must balance advising the nation's central bank on the future of work while managing a workforce that is being reshaped in real time by the very forces under study.
Source:Decrypt News