Microsoft cuts 4,800 jobs, restructures Xbox division

Microsoft has announced a sweeping restructure that will result in approximately 4,800 job losses, representing about 2.1% of its global workforce. A substantial portion of these cuts, over 1,600 roles, will affect the Xbox division.

According to an internal memo, the tech giant stated the necessity to focus on areas that can deliver for customers in a rapidly changing industry. "Companies don't get to choose whether their industry changes; they only get to choose whether they change with it," the memo noted, highlighting the dynamic nature of the technology sector.

The restructuring also includes spinning off four Xbox game development studios: Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs. Xbox CEO Asha Sharma described this as "the most significant restructure in Xbox history," aimed at ensuring future growth amidst intensified competition.

These layoffs and organizational changes occur during a challenging period for the gaming industry, which has seen widespread redundancies across numerous companies in recent years. Industry analysts suggest Microsoft's move reflects a broader trend of adaptation to evolving customer demands and technological shifts, notably the increasing impact of artificial intelligence on work processes across all sectors.

Within Xbox, Mojang Studios – the developer of Minecraft – and King, known for Candy Crush, will now report directly to Sharma. This consolidates the company's focus on its most significant intellectual properties and audiences, while the studios that are being spun off will retain their IP, a move seen as positive amidst broad industry consolidation.