Microsoft to cut 4,800 jobs in major Xbox and gaming division ‘reset’

Microsoft is cutting 4,800 jobs, including 1,600 Xbox workers, as part of a broader reorganization to 'reset' its gaming division amid heightened competition and a 'hardware crisis.' Xbox CEO Asha Sharma said the business is not healthy, with margins 3-10x lower than competitors. The layoffs are not being replaced by AI, according to Microsoft's chief people officer.

Microsoft is cutting 4,800 jobs https://www.fastcompany.com/91569674/microsoft-xbox-layoffs-today-video-game-job-cuts-compulsion-double-fine-ninja-theory-undead-labs-ai-shift , about 2.1% of its global workforce, including a large number of workers at its Xbox video game https://apnews.com/article/xbox-raises-prices-tariffs-microsoft-cd746a5aed59f3f5403ab262d6e149f0 business. The layoffs included 1,600 Xbox workers, with more to come this year in a broader reorganization https://www.fastcompany.com/91559789/xbox-plans-layoffs-even-after-microsoft-ceo-said-company-is-long-on-gaming designed to “reset” Xbox as it faces heightened competition, the company said Monday. “Our business today is not healthy,” said a memo from Xbox CEO Asha Sharma, who took over the gaming division earlier this year. “We are operating at margins that are 3-10x lower than comparable platform and publishing businesses.” Sharma said the industry, in which Xbox https://apnews.com/article/microsoft-layoffs-xbox-f44079957b12370f72e24edebe9fcc6b competes with Sony’s PlayStation and Nintendo’s Switch, is facing a severe “hardware crisis” as costs soar for console components https://apnews.com/article/sony-playstation-price-increase-gaming-b3e056e80192e612b74a56769683ece6 . She said to expect another 1,600 job cuts over the course of the fiscal year that began last week. The company is also spinning off four video game development studios previously acquired by Microsoft. The Xbox cuts are in addition to broader Microsoft layoffs that the software giant’s chief people officer, Amy Coleman, tied to unspecified changes in customer needs. “I also want to be direct that the roles eliminated today are not being replaced by AI https://www.fastcompany.com/section/artificial-intelligence ,” Coleman wrote in a blog post. The layoffs followed voluntary buyouts https://apnews.com/article/microsoft-voluntary-buyouts-ai-224eee4489cbc227244558ff02f5919a that Microsoft began offering to about 8,750 people in May. More than 30% of eligible workers accepted those voluntary retirement offers, Coleman said Monday.