Microsoft cuts 4,800 jobs, mostly at Xbox
Microsoft announced it is laying off 4,800 employees, or about 2% of its global workforce. The majority of cuts target the Xbox division, which will lose 3,200 positions and four studios.
American tech giant Microsoft announced on Monday that it will cut approximately 4,800 jobs, representing around 2% of its worldwide workforce. The Xbox video game and digital entertainment division faces the deepest overhaul in its history, with about 3,200 gaming jobs to be eliminated over the next fiscal year and the loss of four studios.
Amy Coleman, Microsoft’s executive vice president, wrote in a memo to employees: “Our business is changing because the world around it is changing. Companies don’t get to choose whether their industry changes; they only get to choose whether they change with it.” Coleman stated that the layoffs are mostly within Microsoft’s commercial business and Xbox, and emphasized that dismissed employees will not be replaced by AI, though automation is altering work at the company.
Xbox CEO Asha Sharma announced that 3,200 positions will be terminated by the end of the next fiscal year, with 1,600 immediate layoffs. “Our business today is not healthy,” Sharma wrote in an email, noting that the company operates at margins three to ten times lower than other platforms. She said investments in Game Pass, multi-platform content, and a broader portfolio have not grown as expected. “The industry is facing the most severe hardware crisis in its history. We must reset Xbox,” Sharma warned.
Xbox will lose four studios: Compulsion Games and Double Fine Productions will transition to independent studios, while Ninja Theory and Undead Labs have entered terms to join new ownership. In France, Arkane’s management is beginning mandatory consultation with its Works Council to explore potential options.