Microsoft, the technology giant, has implemented extensive job cuts as part of a restructuring effort, with its video game division bearing the brunt of the impact. Approximately 3,200 employees are set to depart from Xbox during this fiscal year, with 1,600 layoffs taking effect on Monday, July 6.
In a memo to employees, Amy Coleman, the executive vice president of Microsoft, stated that about 4,800 positions, equivalent to 2.1% of the global workforce, will be eliminated to align resources with strategic priorities in response to rapid industry changes.
Coleman emphasized that the eliminated roles will not be replaced by artificial intelligence, although AI is transforming work processes. The restructuring primarily affects the Commercial and Xbox segments of the company.
Asha Sharma, the newly appointed chief of Xbox, described the worldwide layoffs as the most significant reorganization in Xbox’s history. She announced plans to reduce the team by approximately 3,200 employees throughout FY27, including 1,600 job cuts on the same day and the transfer of four studios to new management.
As part of the restructuring, four Xbox game development studios – Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Lab – will be spun off. Notably, Xbox slashed 2,000 job roles in 2024, and Microsoft cut 9,000 jobs last year following increased investments in AI technologies.
