Microsoft announces 4,800 job cuts affecting Xbox and sales teams
Microsoft will eliminate about 4,800 positions, including roughly 1,600 in its Xbox division, as part of a broader effort to manage headcount and costs amid AI-related spending.
Microsoft said on Monday that it will cut roughly 4,800 jobs across its Xbox gaming division and sales organizations, including 605 employees based in Washington state. A state filing shows 493 Redmond staff and 112 remote workers are being let go.
Chief People Officer Amy Coleman wrote in an internal memo that the company is seeking ways to avoid future eliminations and will prioritize moving affected staff into roles that align with its strategic priorities. She added that the layoffs are not being replaced by artificial-intelligence systems, emphasizing the need for employees to acquire new skills as work evolves.
The cuts follow a voluntary retirement program launched last month, which saw about 30% of the 8,750 eligible employees accept buyouts. Despite the reductions, Microsoft President Brad Smith told the Seattle Times that the company’s Washington workforce remains stable at about 52,000 employees.
Xbox CEO Asha Sharma said the division is undergoing a major restructuring that will continue through the fiscal year, with plans to reduce Xbox headcount by 3,200 positions by fiscal 2027. The restructuring includes the planned spin-off of four video-game studios and ongoing discussions about a fifth studio’s exit.
Microsoft indicated that the layoffs are part of a broader effort to keep headcount in check as it invests heavily in artificial-intelligence initiatives, which it said contributed to capital expenditures exceeding $140 billion in its fiscal year ending June 30. The company also noted that it has hired about 3,600 employees in Redmond over the past year, and has redeployed roughly 600 staff into new roles.
