Microsoft cuts 4,800 jobs, with Xbox unit bearing largest losses
Microsoft announced a reduction of about 4,800 positions, representing 2.1% of its global staff, with the Xbox division losing 1,600 roles as part of a broader restructuring.
Microsoft said it is eliminating roughly 4,800 positions, or 2.1% of its worldwide workforce, in a new round of layoffs announced on Monday. The cuts will affect the Xbox gaming division most heavily, with 1,600 jobs slated for removal, while the remainder will be spread across commercial sales and other areas.
Amy Coleman, Microsoft’s executive vice president and chief people officer, wrote in an internal memo that the company must "adjust resources and roles" as technology and customer needs evolve. She emphasized that the eliminated positions are not being replaced by artificial intelligence, but noted that AI is changing how work is performed and that employees will need to acquire new skills.
Xbox chief executive Asha Sharma described the move as "the most significant restructure in Xbox history," citing low margins and slower-than-expected growth of initiatives such as the Game Pass subscription. Sharma said the division will flatten its management hierarchy, reduce fourteen layers of management to as few as three, and place longtime executive Helen Chiang in charge of profit and loss for content, hardware, platform, and services.
As part of the reorganization, four Xbox studios will shift to new ownership structures: Compulsion Games and Double Fine Productions will become independent studios, while Ninja Theory and Undead Labs will receive new funding and management. The company also plans to focus on core franchises such as Minecraft (Mojang) and Candy Crush (King).
Microsoft indicated that it is continuing efforts to redeploy staff, noting that more than 4,000 employees have been moved into new roles over the past year, including about 500 this month. The layoffs follow voluntary separation offers made in April and come after a previous round that cut about 15,000 workers in 2025.
The reductions add to a broader trend in the technology sector, where roughly 154,000 jobs have been eliminated in the first half of 2026 across major firms including Meta, Oracle, Amazon and Cognizant.
