Microsoft to cut thousands of jobs, Xbox to be hit hard
The move will affect the company's gaming division, which has been facing the outcome of a "not healthy" business model. The jobs cut will not be replaced by AI, Microsoft's VP said
Microsoft will cut some 4,800 jobs, including the largest overhaul in its gaming brand Xbox, the company said.
Approximately 3,200 jobs will be cut from the company's gaming operations in the coming fiscal year.
The move is meant to cut costs in the Xbox division, which has been struggling in recent years.
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According to Microsoft's Amy Coleman, the company's executive vice president, the jobs that will be cut will not be replaced by AI, despite acknowledging the role automation has across the company.
"Our business is changing because the world around it is changing," Coleman wrote in a memo to Microsoft employees, adding that companies do not choose whether their industry changes, but rather "only get to choose whether they change with it."
Console prices to rise
Explaining the move, chief executive of Microsoft's Xbox brand Asha Sharma called the division's business "not healthy".
Sharma was appointed chief executive in February, promising to return it to growth by 2027.
According to Sharma, Xbox will not become one of the companies that "mistake longevity for inevitability."
Since its acquisition of Activision Blizzard in 2024 for $68.7 billion (€60 billion), Xbox has gone through several rounds of cuts.
The company will also follow its competitors Sony and Nintendo in raising Xbox console prices due to the surge in component costs fuelled by AI that has affected the gaming industry.
