Microsoft said the restructuring is aimed at adapting to a fast-changing technology landscape and improving efficiency.
Xbox has been through successive rounds of cuts since Microsoft’s $68.7 billion acquisition of Activision Blizzard closed in 2024. Picture: Michael N. Todaro / GETTY IMAGES / AFP
Microsoft is cutting thousands of jobs as it reshapes its business and doubles down on artificial intelligence (AI).
The tech giant has announced 4 800 job cuts, equal to about 2% of its global workforce.
It’s eliminating more than 1 600 positions and spinning off several gaming studios.
Restructuring
Microsoft said the restructuring is aimed at adapting to a fast-changing technology landscape and improving efficiency.
The announcement comes as the company continues to invest billions in AI, while the gaming industry faces rising costs and weaker demand.
Xbox
The cuts will primarily impact Microsoft’s Xbox gaming division, according to an email the company posted online this week to Xbox employees.
“After careful consideration, I’ve made the difficult decision to reduce our team by approximately 3 200 throughout FY27,” wrote Asha Sharma, the new head of Microsoft’s gaming division. “This will include approximately 1 600 role eliminations today, and in addition, four studios will leave Xbox to new management.”
“I know this is painful. These changes will directly affect people who have poured their creativity into building Xbox. Many joined us through acquisitions, while others were recruited here, or sought us out because they loved this industry and loved Xbox. Today’s decisions do not reflect their talent or dedication.”
Xbox has been through successive rounds of cuts since Microsoft’s $68.7 billion acquisition of Activision Blizzard in 2024, after a long review process by regulators over competition concerns.
Tech lay-offs
The announcement is the latest in a string of mass layoffs by the technology giant as it spends massive amounts of money to stay in the AI race, with companies investing tens of billions of dollars in AI-ready data centres and computing power.
On June 25, Microsoft said it will raise the price of its Xbox video game consoles worldwide as a component-cost surge fueled by AI affects the industry.
Sony and Nintendo have also raised the prices of their game consoles, and Apple announced substantial increases in the prices of its Macs and iPads.
