*Image generated by ChatGPT
Microsoft is cutting approximately 4,800 positions across its global workforce, representing about 2.1% of its total employees. The company disclosed the reductions on Monday, with a significant portion targeting its Xbox gaming division amid broader industry shifts driven by advancing technology.
In an internal memo to staff, Amy Coleman, Microsoft’s executive vice president and chief people officer, linked the job cuts to rapid changes in the technology landscape. While emphasizing that none of the eliminated roles would be directly replaced by artificial intelligence, she acknowledged the transformative impact of the technology.
“Our business is changing because the world around it is changing. The way technology is built, deployed, and used is transforming faster than at any point in my time here,” Coleman stated.
The layoffs come as Microsoft continues to navigate an evolving tech sector where artificial intelligence is altering workflows and productivity expectations. Coleman noted that “AI is changing how work gets done,” highlighting the need for the company to adapt its structure to remain competitive in this new environment.
The impact is particularly acute in the Xbox division, which oversees Microsoft’s popular gaming console and related services. Xbox CEO Asha Sharma outlined plans to eliminate 1,600 positions immediately as part of Monday’s announcement, followed by an additional 1,600 cuts through the end of fiscal year 2027.
“We are beginning the most significant restructure in Xbox history,” Sharma said in a separate memo to employees. “Our business today is not healthy.”
Sharma pointed to underwhelming performance from the company’s Game Pass subscription service, which provides access to a library of games for a monthly fee.
The division has also faced intensifying competition from both major publishers and smaller independent studios in its push to expand its catalog of new titles. Despite the restructuring, Microsoft confirmed that no first-party games or projects already publicly announced would be canceled.
The job reductions mark one of the more notable workforce adjustments for Microsoft in recent memory, arriving as the company invests heavily in artificial intelligence initiatives while optimizing other segments of its vast operations. Shares of Microsoft dipped roughly 1% in early trading following the announcement.
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