Microsoft Corp will conduct another round of significant layoffs in its Xbox division next week as part of a broader reorganisation, Bloomberg reported.
Managers at Xbox expect “major cuts across the board,” the report stated.
This will mark Xbox’s fourth major layoff in the past 18 months, following three substantial reductions last year and the closure of several subsidiaries. Xbox, which develops video-game hardware and software, has faced pressure from Microsoft executives to improve profit margins since the $69 billion acquisition of Activision Blizzard Inc, finalised in 2023.
The tech giant often implements major organisational changes at the end of its fiscal year, which concludes on 30 June.
Previous Layoff Rounds
Earlier this month, Microsoft laid off more than 300 employees as part of its cost-cutting measures, Bloomberg reported. A Microsoft spokesperson said the move aims to drive the company’s growth in a dynamic marketplace. These job cuts follow the layoffs of approximately 6,000 employees a few weeks prior.
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said, according to Bloomberg.
In May, Microsoft reduced its workforce by 3%, affecting around 6,000 employees across all levels, teams and geographies. This was the company’s largest round of layoffs since it eliminated 10,000 roles in 2023. In January, Microsoft terminated a small number of employees, citing performance-based issues.
Microsoft’s layoffs coincide with its significant investments in artificial intelligence. The company recently announced a $400 million investment in Switzerland to develop cloud-computing and AI infrastructure. In January, Microsoft committed $3 billion to develop AI infrastructure, including new data centres in India in the next two years.
“The investments in infrastructure and skilling we are announcing today reaffirm our commitment to making India AI-first,” Microsoft chairman and CEO Satya Nadella said earlier.
These layoffs reflect a broader trend in the global tech industry. Tech giants such as Google and Amazon have also announced significant job cuts. In early May, Google laid off around 200 employees, primarily in its global business unit in teams handling sales and partnerships. Similarly, Amazon reduced approximately 100 jobs in its devices and services unit in another round.
