- Microsoft is cutting 4,800 jobs in its sales and Xbox divisions, per Bloomberg report
- Xbox will reduce its workforce by 3,200 jobs throughout fiscal year 2027
- Four Xbox game studios will be spun off or sold amid company restructuring
Microsoft has engaged in the layoff of 4,800 jobs across its sales and Xbox division, according to a Bloomberg report on Monday, which cited an insider.
Half the layoffs are due to the tech giant's overhaul of their Xbox console gaming division, as per the report.
This is an important email I sent today to all employees at XBOX:
— ASHA (@asha_shar) July 6, 2026
Team,
We are beginning the most significant restructure in XBOX history. After careful consideration, I've made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include…
ALSO READ: Xbox Plans Significant Layoffs as New CEO Plans Overhaul
Xbox will be reducing its workforce by 3,200 across the fiscal 2027, with 1,600 jobs slashed on Monday, as per Xbox's chief executive officer.
"We are beginning the most significant restructure in XBOX history. After careful consideration, I've made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include approximately 1,600 role eliminations today, and in addition, four studios will leave XBOX to new management," Xbox CEO Asha Sharma, said in an 'X' post citing the e-mail she sent employees.
Sharma stated that the company's margins are 3–10 times lower than its peers in gaming platform and publishing, stating that the company's rabid expansion did not yield the profits to justify it.
The Xbox CEO announced a reset of the firm's content and platform portfolio, which involves spinning off and/or selling four of its game development studios and reducing management layers from 14 to five or three.
"We have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested," Sharma said.
The company will be spinning-off and selling Compulsion Games, Double Fine Productions, Ninja Theory and Undead Labs, with the former two going independent and the latter two being sold. Sharma added that game studio Arkane's management is commencing its required consultation with its Works Council in France to review potential strategic options.
"As we reset XBOX, we will help independent creators succeed by providing open development tools and audiences to realize their vision," she added.
ALSO READ: More Layoffs At Microsoft? Tech Giant Plans To Cut Jobs In Xbox, Sales & Consulting: Report
In 2025, Microsoft slashed 6,000 roles in May and an additional 9,000 employees, or about 4% of the company's workforce, in July.
The job cut plan highlights Microsoft's efforts to rein in costs as it ramps up spending on AI, the report said. It is also facing pressure from Wall Street over concern that AI could replace software services, including, in theory, some Microsoft offerings. The stock has tanked about 17% in last month.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
