Microsoft, a technology giant, has implemented significant job cuts as part of a restructuring effort, with its video game division being heavily impacted. Approximately 3,200 individuals are set to depart from Xbox during this fiscal year, with 1,600 layoffs already taking effect on Monday, July 6.
In a memo to employees, Amy Coleman, an executive vice president at Microsoft, stated that the company is eliminating around 4,800 positions, equating to about 2.1% of its global workforce. This move aims to refocus resources on key priorities to ensure Microsoft remains competitive in a rapidly evolving industry landscape.
Coleman emphasized that the roles eliminated are not being replaced by artificial intelligence (AI), although AI is reshaping how tasks are accomplished. The reorganization primarily impacts the Commercial and Xbox segments of the company.
Asha Sharma, the new chief of Xbox, informed staff that the global job cuts signify the most significant restructure in Xbox’s history. She confirmed that approximately 3,200 positions will be reduced throughout FY27, including 1,600 immediate role eliminations and the transfer of four studios to new management.
As part of the restructuring, four Xbox game development studios, namely Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Lab, will be spun off. This move follows previous job cuts in 2024 by Xbox and in the previous year by Microsoft as it bolstered investments in AI technology.