Microsoft said it is laying off around 4,800 employees as compulsion games sits inside a broader Xbox reset tied to the start of its new financial year. Most of the cuts hit Microsoft’s commercial sales business and Xbox, with around 1,600 Xbox employees affected today.
Amy Coleman on AI and jobs
Amy Coleman, Microsoft’s executive vice president and chief people officer, said the changes reflect a shifting technology industry and the need to “adjust resources and roles and shift how we operate.” She also said, “I also want to be direct that the roles eliminated today are not being replaced by AI” and added, “AI is changing how work gets done.”
The scale is not small. Microsoft said the layoffs equal about 2.1 percent of its workforce. For Xbox, the cuts land in a business already being pared back: Microsoft plans to eliminate around 20 percent of Xbox jobs by the end of the financial year, which means the current 1,600-person reduction is part of a larger reduction still ahead.
Xbox layoffs and studio sales
Microsoft is also selling off four Xbox studios and weighing the sale of another studio. That makes the job cuts look less like a one-off reduction and more like a wider reshaping of the Xbox business, with staffing and studio ownership moving at the same time.
Coleman said Microsoft has tried to avoid cuts where it could. She said, “Whenever possible, our priority is to place people into new roles aligned to the company’s highest priorities and greatest areas of opportunity,” and added, “Over the past year, we have redeployed more than 4,000 employees into new roles, including another 500 this month.” Microsoft also said more than 30 percent of eligible employees took part in its recent voluntary retirement program.
Microsoft’s broader reset
The retirement package included five years of Microsoft healthcare coverage, a lump sum cash severance payment and six months of vesting for unvested stock options. A year earlier, Microsoft cut around 9,100 employees, a reminder that today’s move fits into a longer stretch of restructuring rather than a single round of layoffs.
For employees, the immediate change is simple: 4,800 jobs are gone today, and more Xbox reductions are still scheduled before the financial year ends. For the company, the sharper question is how far the Xbox reset goes after four studios are sold and another is under review.
