Microsoft Sheds 4,800 Roles, Xbox Division Heavily Impacted

Software giant Microsoft has announced a significant reduction in its global workforce, with approximately 4,800 positions eliminated, representing about 2.1% of its total employees. A substantial portion of these job cuts, specifically 1,600 roles, were within its Xbox video game division. The company indicated on Monday, July 6, that further layoffs are anticipated later this year as part of a comprehensive restructuring effort aimed at revitalizing the Xbox brand amidst intensifying market competition.

In an internal memo, Xbox CEO Asha Sharma, who assumed leadership of the gaming segment earlier this year, conveyed concerns about the current state of the business. Sharma stated, “Our business today is not healthy,” and highlighted the division's struggle with profitability, noting, “We are operating at margins that are 3-10x lower than comparable platform and publishing businesses.” She further explained that the gaming industry, where Xbox competes directly with rivals like Sony's PlayStation and Nintendo's Switch, is grappling with a severe “hardware crisis” due to escalating costs associated with console components.