Jared Palmer, Xbox's VP of engineering, has announced his move to Cognition, an artificial intelligence company, after joining Xbox just three months ago. Palmer was recruited by Asha Sharma when she assumed leadership of Xbox in February, replacing Phil Spencer. He had previously worked with Sharma at Microsoft's CoreAI team before the transition.

Palmer's departure occurs during a period of major restructuring at Xbox, where Sharma has executed immediate layoffs affecting 1,600 employees with plans for 1,600 additional cuts across fiscal year 2027. The division is simultaneously divesting from four studios and planning to close another, creating uncertainty about the platform's direction and resource availability during the typically critical engineering phase preceding the Project Helix console launch.