Microsoft has announced another round of job cuts, with 4,800 employees set to lose their jobs globally as the company restructures parts of its business. The layoffs account for around 2.1 per cent of Microsoft’s global workforce and will significantly impact its Xbox gaming division, per a report by Hindustan Times.
The latest workforce reduction comes as the company looks to streamline operations and respond to challenges in the gaming industry.
Xbox division to see the biggest cuts
A major share of the layoffs will take place within Microsoft’s Xbox business. Around 1,600 employees at Xbox have already been affected, and the company has indicated that more job cuts are likely during the current fiscal year.
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Xbox CEO Asha Sharma, who took charge of the gaming division earlier this year, said the restructuring is necessary to reset the business.
“Our business today is not healthy,” Sharma said in a memo, HT reported. “We are operating at margins that are 3-10x lower than comparable platform and publishing businesses.”
She also highlighted the difficulties facing the gaming hardware market.
“The industry, in which Xbox competes with Sony’s PlayStation and Nintendo’s Switch, is facing a severe ‘hardware crisis’ as costs soar for console components.”
According to Sharma, another 1,600 Xbox job cuts are expected over the course of the fiscal year that began last week. As part of the overhaul, Microsoft is also spinning off four video game development studios that it had acquired earlier.
Layoffs extend across Microsoft
The changes at Xbox are part of a broader round of layoffs across Microsoft. The company said the decision is linked to changing business priorities rather than the growing use of artificial intelligence.
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Chief People Officer Amy Coleman said the workforce reduction reflects shifting customer needs and is not aimed at replacing employees with AI.
The latest announcement follows Microsoft’s voluntary buyout programme introduced in May for around 8,750 employees. According to Coleman, more than 30 per cent of eligible employees accepted those offers.
With the latest round of layoffs, Microsoft is continuing its workforce reorganisation while reshaping parts of its gaming business to address financial and market pressures.
FAQs:
Why is Microsoft laying off 4,800 employees?
The company said the layoffs are part of a broader business restructuring and changing customer requirements.
Which Microsoft division is most affected by the layoffs?
The Xbox gaming division is facing the largest share of the workforce reductions.
