Microsoft is reportedly preparing to lay off employees from its Xbox division next week. According to a report by Bloomberg, the cuts are expected to be part of a broader company-wide restructuring effort. Sources familiar with the matter indicated that managers within the Xbox business unit are anticipating “considerable” reductions. This marks the fourth major layoff for the Xbox team since early 2023, following three previous rounds and the closure of several subsidiary studios.
The layoffs come amid growing pressure from Microsoft’s leadership to improve profitability within the Xbox business, which handles both hardware and software. The scrutiny reportedly intensified after the company completed its $69 billion acquisition of Activision Blizzard in 2023, the largest deal in Microsoft’s history. The company is now looking to streamline operations and improve margins ahead of the close of its financial year on June 30.
Ongoing layoffs across Microsoft
The upcoming cuts in Xbox add to a string of recent workforce reductions. Microsoft laid off over 300 employees earlier this month, just weeks after cutting 6,000 roles across departments, bringing the total to over 6,300 in recent weeks. These represent the company’s second-largest set of layoffs since 2023, when it eliminated 10,000 jobs in a single wave.
While the company has not officially confirmed which roles will be affected, past cuts have included software engineers, project managers, and sales staff. Bloomberg previously reported that Microsoft’s sales departments will be impacted in the upcoming round as well.
Satya Nadella calls it a “realignment”
In a previous internal town hall, Microsoft CEO Satya Nadella told employees that the layoffs were not performance-based but part of a larger realignment. “This was not about people failing. It was about repositioning for what comes next,” he said.
Microsoft has not issued an official statement regarding the latest round of job cuts.
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