Microsoft is laying off 4,800 employees worldwide, including about 1,600 in its Xbox gaming division, as the tech giant restructures its business to improve performance and adapt to changing market conditions.
The job cuts, announced on Monday, represent around 2.1 percent of Microsoft`s global workforce. The company said the Xbox reductions are part of a broader effort to reshape its gaming business amid rising competition and slowing growth.
In a memo to employees, Xbox CEO Asha Sharma said the gaming division is undergoing a major reset, describing its current performance as unsustainable.
She said Xbox`s profit margins remain significantly lower than those of rival gaming platforms and publishers, while rising hardware costs have added further pressure on the business.
Microsoft also plans to spin off four game development studios acquired in recent years and eliminate an additional 1,600 Xbox positions during the current fiscal year.
The restructuring comes nearly three years after Microsoft`s $69 billion acquisition of Activision Blizzard, a deal that brought blockbuster franchises such as Call of Duty under its ownership and was expected to strengthen its gaming ecosystem and subscription business.
Sharma said the acquisition had created value but had not delivered the level of growth the company had anticipated.
The Xbox layoffs are part of a wider workforce reduction across Microsoft. Chief People Officer Amy Coleman said the changes reflect shifting customer demand and evolving business priorities.
Coleman also said the positions being eliminated are not being replaced by artificial intelligence.
The latest announcement follows voluntary retirement buyout offers made to about 8,750 employees in May, with more than 30 percent of eligible staff choosing to accept the offers, according to the company.
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