Microsoft to Cut 4,800 Jobs Amid Xbox Reorganization, Shifting Focus to Five Key Gaming Studios

Microsoft Announces Largest Single Layoff Cycle in Gaming History

Microsoft has initiated a significant restructuring of its gaming division, cutting 4,800 jobs, approximately 2.1% of its workforce, on Monday, July 6. The Xbox division is reportedly losing about one-fifth of its staff as part of the company's latest effort to cut costs in the artificial intelligence era.

The restructuring of its gaming division will involve 3,200 job cuts, including laying off 1,600 employees on Monday. Microsoft shares fell 1.7% at 9:55 a.m. in New York. In total, planned cuts across Microsoft announced on Monday total 6,400, which amounts to less than 3% of the company's total headcount of approximately 228,000.

The company's chief people officer, Amy Coleman, acknowledged the significant changes in a message to employees. "The way technology is built, deployed, and used is transforming faster than at any point in my time here," she wrote. The Xbox division has been particularly affected by the restructuring, with thousands of staff laid off and many projects canceled since the company's $69 billion acquisition of Activision Blizzard in the fall of 2023.