Microsoft has announced it will cut 4,800 jobs as part of a major restructuring, with the Xbox gaming division being the hardest hit.
Foreign news agencies reported on 6 Jul 2026 that Microsoft, a global computing giant, announced it would reduce its workforce by 4,800 positions, about 2.1% of total employees, with the Xbox gaming brand significantly impacted by this latest round of layoffs.
Amy Coleman, Microsoft’s Executive Vice President, wrote in a memo to employees that the company must focus on business areas that meet customer needs amid a "rapidly changing industry."
This major layoff will immediately cut more than 1,600 Xbox employees, with an additional 1,600 positions expected to be reduced by next year.
Asha Sharma, recently appointed CEO of Xbox, wrote to employees that the brand is "beginning the most significant organizational restructuring in Xbox’s history."
Additionally, four Xbox game development studios—Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs—will be spun off as part of the comprehensive restructuring plan.
"These changes are made for a greater future for Xbox, not to downsize," Sharma stated. "History is full of companies mistakenly believing longevity guarantees stability. We will not be one of those companies."
Meanwhile, Coleman pointed to shifting customer demands during the announcement of company-wide layoffs at Microsoft, saying, "Companies don’t get to choose whether their industries change, only whether to adapt to those changes."
She also noted that while the company is not directly replacing lost jobs with AI, "the reality is AI is transforming how we work."
This move comes amid already difficult times for the gaming industry, as many studios have yet to recover from major layoffs in recent years.
In 2024, Xbox cut over 2,000 jobs and shut down four studios it had acquired before the massive acquisition of Activision Blizzard, the maker of Call of Duty.
Just over a year later, Microsoft announced plans to lay off an additional 9,000 employees after deciding to double its multibillion-dollar AI investment budget.
Rising hardware costs have forced companies including Microsoft to increase prices on long-released game consoles and other IT equipment, with many blaming AI data center demand for pushing supply chains to their limits.
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Source:bbc