Microsoft, a prominent tech company, has implemented significant layoffs as part of a restructuring effort, with its gaming division bearing the brunt of the impact. Approximately 3,200 individuals will be departing from Xbox during this fiscal year, with 1,600 job cuts already taking effect on July 6.
In a memo to employees, Amy Coleman, Microsoft’s executive vice president, stated that the company is eliminating around 4,800 positions, equivalent to 2.1% of its global workforce. The restructuring aims to align resources towards key priorities that will enable Microsoft to meet customer needs in a rapidly evolving industry.
Coleman emphasized that the roles eliminated are not being filled by artificial intelligence (AI), although AI is reshaping work processes. The restructuring primarily affects Microsoft’s Commercial and Xbox divisions.
Asha Sharma, the newly appointed head of Xbox, informed staff that the global layoffs mark the start of the most significant reorganization in Xbox’s history. She noted that approximately 3,200 positions will be cut throughout the fiscal year, including 1,600 immediate job eliminations and the transfer of four studios to new management.
As part of the restructuring, four Xbox game development studios—Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Lab—will be spun off. This move follows previous job cuts in 2024 by Xbox and in the prior year by Microsoft, coinciding with increased investments in AI technologies.
