Xbox loses another top executive: VP of Engineering resigns after just two months

Another high-ranking Xbox executive has left the company. Jared Palmer departed Xbox only two months after being appointed Vice President of Engineering and technical advisor to CEO Asha Sharma. He has joined the AI startup Cognition, where he will lead the company’s engineering organisation.

Palmer’s departure follows a series of notable leadership changes at Xbox. Phil Spencer, the veteran head of Microsoft Gaming, retired in February 2026 after 38 years at Microsoft, while Xbox President Sarah Bond also stepped down during that same executive restructuring.

His exit comes just weeks after Sharma named him part of her new leadership team at Xbox during a management shake-up in May. At the time, Sharma stated that Palmer would report directly to her and work on “our most complex product and engineering challenges,” focusing on developer tools, infrastructure, and engineering strategy.

Before joining Xbox, Palmer spent nearly eight months as VP of Product for Microsoft’s CoreAI division—a unit Sharma led prior to becoming Xbox CEO. Before his time at Microsoft, Palmer worked for nearly four years at Vercel, an AI infrastructure company, where he served as VP of AI.

Why did he leave Xbox?

Although Palmer hasn’t explained why he left Xbox so suddenly, but his next stop puts him back in the thick of AI. He’s headed to Cognition, the startup behind Devin, an AI agent that can plan out, write, test, and deploy real production code inside existing codebases pretty much on its own.

It’s a genuine setback for Xbox. The company had specifically brought Palmer on to work alongside CEO Asha Sharma on developer tools, infrastructure, and other tough engineering problems.

And the timing isn’t great. Xbox’s gaming division is currently going through what Sharma has called a total “reset” — around 3,200 jobs are being cut, about a fifth of the whole workforce, while four internal studios, Double Fine and Compulsion Games among them, are getting spun off or handed over to other owners.

In a memo laying out the changes, Sharma was blunt, describing the business as “unhealthy.” She pointed to console growth losing steam, profit margins sitting three to ten times below rival platforms, and a management structure that had become too complicated. The plan now is to simplify that hierarchy, clean-up operations, and make accountability clearer throughout the organisation.