June 10 (Reuters) - Microsoft's ( MSFT ) Xbox division is

planning major layoffs next month and significant cuts to

marketing and other budgets, Bloomberg News reported on

Wednesday.

The job cuts would mark the first major restructuring under

Asha Sharma, who took charge as CEO of the gaming unit in

February.

Microsoft ( MSFT ) did not immediately respond to a Reuters request

for comment.

Xbox has faced mounting challenges in recent years as

Microsoft's ( MSFT ) bet on subscriptions and cloud gaming failed to

offset declining console sales and a shortage of blockbuster

titles.

Sharma said Xbox's accountability margin had fallen to 3%

and that the company had spent more than $20 billion on content,

platforms and hardware subsidies over the past five years even

as annual revenue declined by nearly half a billion during that

period, Bloomberg reported, citing an internal email to

employees.

She said Xbox would need to rebuild its platform

infrastructure and rethink its portfolio in the weeks and months

to come, the report said.

The exact scale of layoff is not yet clear. It is expected

shortly after the close of Microsoft's ( MSFT ) fiscal year on June 30,

according to the report.

In April, Microsoft ( MSFT ) lowered prices for its Game Pass service

and ended day-one releases of future "Call of Duty" titles on

the platform, marking one of the first major strategy changes

under the new gaming chief.