Microsoft cuts 4,800 jobs, expands Xbox overhaul

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1–2 minutes

Summary

Microsoft said it cut 4,800 jobs as Xbox begins a longer restructuring and AI spending remains high.

Why this matters

The cuts show how Microsoft is reshaping parts of its business, especially gaming, while maintaining large AI investments. They also reflect a wider tech industry shift toward funding AI even as companies reduce headcount elsewhere.

Microsoft is cutting 4,800 jobs, or about 2.1% of its workforce, as it restructures parts of its business while continuing to invest heavily in artificial intelligence, according to CNBC.

The cuts followed an April voluntary retirement program for U.S. employees at the senior director level and below. CNBC reported that more than one-third of eligible employees accepted the offer, and Microsoft could consider similar programs in the future.

Microsoft’s gaming division is also undergoing a longer restructuring. Xbox CEO Asha Sharma told employees the unit will cut 3,200 jobs through fiscal 2027, including 1,600 positions eliminated Monday and another 1,600 on top of the companywide total.

“I recognize that a year-long restructuring creates additional challenges,” Sharma wrote. “Unfortunately, it is not possible to make all the necessary changes in a single day.” She also told employees, “We will return to growth in 2027.”

Chief People Officer Amy Coleman said the changes reflected broader shifts in the industry, writing that “the way technology is built, deployed, and used is transforming faster than at any point in my time here.”

As part of the gaming overhaul, Compulsion Games and Double Fine Productions will become independent again. Ninja Theory and Undead Labs have entered terms to join new ownership. Arkane Studios, acquired through Microsoft’s $8.1 billion purchase of ZeniMax Media, is exploring strategic options with its works council.

Oracle’s workforce declined by 21,000, or 13%, in fiscal 2026. Meta Platforms’ May 20 restructuring included 10% layoffs, 7,000 staff moved to AI initiatives, and 6,000 open roles closed; Salesforce cut fewer than 1,000 jobs; and Amazon confirmed 16,000 corporate cuts.

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