Microsoft Cuts 4,800 Jobs in Xbox and Gaming Division 'Reset'
Facing increased competition and rising costs in the gaming industry, Microsoft announced 4,800 job cuts, with a significant portion impacting its Xbox division.
Microsoft announced on Monday a reduction of 4,800 jobs, representing approximately 2.1% of its global workforce. The layoffs will significantly impact the company's Xbox video game division.
The cuts, with 1,600 specifically affecting Xbox employees, are part of a broader reorganization intended to "reset" the division amidst heightened industry competition. "Our business today is not healthy," stated Xbox CEO Asha Sharma in a memo, noting lower profit margins compared to competitors. Sharma cited a severe "hardware crisis" driven by soaring costs for console components.
The challenges come as Xbox competes with Sony's PlayStation and Nintendo's Switch. Sharma indicated that further layoffs are anticipated over the course of the fiscal year, and four previously acquired video game studios will be spun off. These actions aim to refocus the gaming business.
These Xbox-specific layoffs are in addition to wider job reductions at Microsoft, which Chief People Officer Amy Coleman attributed to evolving customer needs. Coleman clarified that the eliminated roles are not being replaced by artificial intelligence. The workforce reductions follow voluntary buyouts offered in May, which were accepted by over 30% of eligible employees.