Tech giant Microsoft has announced it will slash approximately 4,800 jobs, with its gaming division, Xbox, bearing the brunt of the layoffs. The move comes as the company seeks to overhaul a business model described by leadership as "not healthy".
According to company officials, approximately 3,200 positions will be eliminated from gaming operations within the coming fiscal year. This major restructuring follows Microsoft’s massive $68.7 billion acquisition of Activision Blizzard in 2024, which has already triggered several rounds of staff reductions.
Asha Sharma, the CEO of Xbox who took the role in February, stated the cuts are necessary to return the division to growth by 2027. Microsoft Executive Vice President Amy Coleman clarified in a memo to staff that while the industry is changing, the jobs being cut will not be replaced by Artificial Intelligence (AI), despite the company's increasing use of automation elsewhere.
In addition to the job losses, consumers should expect a price hike for Xbox consoles. Microsoft plans to follow competitors Sony and Nintendo in raising hardware prices, citing a surge in component costs driven by the global demand for AI technology.
