Key facts
- Microsoft is laying off approximately 4,800 employees, representing 2.1% of its global workforce.
- The majority of job cuts will affect the sales and Xbox divisions.
- Four Xbox game development studios—Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs—will be spun off.
- The company is restructuring to align with evolving customer needs and increased investment in AI.
- Over 4,000 employees have been redeployed into new roles within Microsoft in the past year.
Microsoft has announced it is cutting approximately 4,800 jobs globally, representing about 2.1% of its workforce. The majority of these layoffs will impact the sales and Xbox divisions. Xbox, Microsoft's video game and digital entertainment division, will see around 3,200 gaming jobs cut over the next fiscal year, with 1,600 immediate terminations. Four Xbox game development studios—Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs—are also being spun off as part of a significant restructuring.
Amy Coleman, an executive vice president at Microsoft, stated in a memo that the company must adapt to a changing industry and that the layoffs are necessary for investment in artificial intelligence. She emphasized that the dismissed employees would not be replaced by AI, though automation is altering work within the company. Asha Sharma, Executive Vice President at Xbox, described the situation as a necessary reset for the division, citing lower margins compared to other platforms and slower-than-expected growth in areas like Game Pass and multi-platform content.
Microsoft has also focused on internal redeployment, with over 4,000 employees transitioned into new roles within the company over the past year. Sharma indicated that the restructuring aims for a "bigger future for Xbox" and involves a reset across its content portfolio, platform, and operations.