Xbox Engineering VP Jared Palmer Departs for AI Startup Cognition

By: Harsh Vardhan

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Updated on: 22-Jul-2026 05:00 PM

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Jared Palmer, recently appointed vice president of engineering at Xbox, has left the company after only two months. Palmer has joined artificial intelligence startup Cognition, where he will lead the engineering organization. His departure follows a series of significant leadership changes at Xbox, including the retirement of Microsoft Gaming chief Phil Spencer in February 2026 after 38 years with the company and the exit of Xbox President Sarah Bond during the same period.

Key Highlights

• Jared Palmer leaves Xbox two months after being named vice president of engineering.
• Palmer joins AI startup Cognition to lead its engineering organization.
• Xbox faces major restructuring with 3,200 job cuts and internal studio transfers.
• Recent leadership changes include Phil Spencer's retirement and Sarah Bond's exit.
• Xbox CEO Asha Sharma cites slowing growth and low profit margins in internal memo.

Leadership Changes at Xbox

Palmer's exit comes just weeks after Xbox CEO Asha Sharma named him as part of her new leadership team in May. Sharma had appointed Palmer to address complex product and engineering challenges, focusing on developer tools, infrastructure, and engineering strategy. Palmer was set to report directly to Sharma and play a key role in the division's technical direction.

Before joining Xbox, Palmer served as Microsoft's Vice President of Product in the CoreAI division for about eight months. Sharma previously led this division before becoming Xbox CEO. Palmer also spent nearly four years at Vercel, an AI infrastructure company, where he held the role of Vice President of AI.

Palmer's Move to Cognition

Palmer announced his new position at Cognition in a post on X, expressing gratitude to Sharma and the Xbox team for his time there. His LinkedIn profile now lists him as Vice President of Engineering at Cognition. Cognition is known for developing Devin, an autonomous software engineering agent that can plan, write, test, and deploy production code within existing codebases.

Palmer has not publicly disclosed the reasons for his quick departure from Xbox. However, his move to Cognition marks a return to the AI sector, where he has significant experience. At Cognition, Palmer will lead engineering efforts as the company continues to develop advanced AI tools for software development.

Xbox Undergoing Major Restructuring

Palmer's departure comes during a period of major change at Xbox. CEO Asha Sharma recently announced a comprehensive restructuring of the gaming division. This overhaul includes cutting around 3,200 jobs, which represents about 20 percent of the Xbox workforce. The company is also spinning off or transferring four internal studios, including Double Fine and Compulsion Games.

In an internal memo, Sharma described Xbox's business as "not healthy." She cited slowing console growth, profit margins that lag behind rival gaming platforms by three to ten times, and a complex organizational structure. The restructuring aims to flatten management, streamline operations, and strengthen accountability throughout the business.

Palmer's exit is seen as a notable loss for Xbox, given his expertise in engineering and AI. He was brought in to work closely with Sharma on key technical initiatives. His move to Cognition highlights the ongoing demand for experienced engineering leaders in the fast-evolving AI sector.