Microsoft announces it will cut about 4,800 jobs worldwide, roughly 2% of its global workforce, as part of cost reductions and a restructuring of its Xbox gaming business. Multiple outlets report that the cuts include commercial operations and Xbox, with Microsoft executives attributing the changes to shifting market conditions. The company says about 1,600 Xbox positions are eliminated immediately, with the remaining reductions to occur through fiscal year 2027. Reporting also indicates that approximately 3,200 gaming jobs are expected to be cut over the coming fiscal year.
For Xbox, the restructuring includes plans to spin off or sell four game studios and to put a fifth studio into a review process that could lead to closure. Outlets describe the Xbox business as under pressure, citing weak profitability and industry-wide hardware downturns. Microsoft also frames the layoffs alongside ongoing investment in artificial intelligence infrastructure. Separately, Microsoft has been reported as pursuing broader AI-related efforts, including work focused on enterprise customers.
The move follows earlier rounds of layoffs at Xbox and the post-acquisition restructuring period after Microsoft’s Activision Blizzard deal closed in 2024.
