Microsoft lays off 4,800 employees, cuts 20% of gaming staff
Technology giant Microsoft announced on Monday it is laying off 4,800 employees, or 2.1% of its workforce. The cuts include nearly 20% of its Xbox gaming division staff.
Microsoft announced on Monday that it will cut 4,800 jobs, representing 2.1% of its global workforce, as part of a significant cost-cutting restructuring. The layoffs will disproportionately affect the Xbox division, with up to 3,200 employees, or 20% of that unit's staff, to be cut by fiscal year 2027.
The company is reorienting its strategy to focus on artificial intelligence (AI) while scaling back on certain areas of its gaming business. In an internal memo, Xbox CEO Asha Sharma stated the division's "business today is not healthy," citing significantly lower margins compared to comparable platforms and publishing businesses.
These reductions follow a previous wave of 9,000 job cuts at Microsoft in January 2023. The current restructuring also involves spinning off four gaming studios: Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs, making them independent entities.
The announcement comes shortly after Microsoft increased prices for its Xbox consoles and Surface laptops. The company attributed these price hikes to AI-driven shortages in memory and storage components. Microsoft's stock saw a decline in trading on Monday following the news of the layoffs.