Microsoft cuts 1,600 jobs in Xbox division
Microsoft has initiated significant restructuring within its Xbox division, resulting in approximately 1,600 immediate job eliminations.
Microsoft is implementing substantial job cuts within its Xbox gaming division, eliminating approximately 1,600 roles immediately as part of a wider reduction of around 4,800 positions across the company.
In an email to employees, Xbox CEO Asha Sharma described the move as "the most significant restructuring in Xbox history." These cuts are part of a plan to reduce 3,200 positions by the end of fiscal year 2027. Industry sources indicate these actions are not directly related to AI automation.
The restructuring involves flattening the organizational structure and reducing management layers, aiming to streamline operations and reduce costs. The new structure emphasizes individual contributors, player-coaches, and directly responsible individuals (DRIs).
Microsoft attributes the changes to broader industry shifts and evolving customer needs. These reductions occur while Microsoft is increasing its investment in AI projects, a juxtaposition that has drawn attention from industry observers.
The company is also making four game studios independent from Xbox. These cuts reflect wider trends in the gaming industry, which has seen significant layoffs and declining revenues in recent years.