Microsoft will cut about 4,800 jobs, including the biggest overhaul at its gaming brand Xbox, the company said.
About 3,200 jobs will be cut from the company’s gaming operations in the upcoming fiscal year.
The move is aimed at cutting costs in the Xbox division, which has struggled in recent years.
Despite acknowledging the role of automation across the company, the jobs that will be cut will not be replaced by AI, according to Microsoft’s Amy Coleman, the company’s executive vice president.
“Our business is changing as the world around it is changing,” Coleman wrote in a memo to Microsoft employees. He said that companies do not choose whether or not their industry changes, but rather they “only have to choose whether or not they change with it.”
Console prices will increase
Explaining the move, Asha Sharma, CEO of Microsoft’s Xbox brand, called the division’s business “not healthy”.
Sharma was appointed CEO in February, promising to return to growth by 2027.
According to Sharma, Xbox will not become one of those companies that “mistakes longevity for inevitability.”
Since its acquisition of Activision Blizzard for $68.7 billion (€60 billion) in 2024, Xbox has gone through several rounds of cutbacks.
The company will also follow its rivals Sony and Nintendo in raising prices of Xbox consoles due to component-cost increases driven by AI affecting the gaming industry.
Edited by: Wesley Dockery
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