Xbox staff brace for major layoffs as Microsoft plans fourth round of cuts in 18 months: Report

Microsoft is bracing for another major shakeup. The tech behemoth is expected to slash jobs in its Xbox division next week as part of a sweeping internal restructuring. Managers in the gaming unit are already bracing for substantial cuts, according to Bloomberg. While Microsoft has yet to confirm the move, this would mark the company’s fourth layoff wave in just 18 months.

Microsoft’s restructuring streak has already shuttered multiple subsidiaries this year. The Xbox division, now under intense pressure to boost profits following the $69 billion acquisition of Activision Blizzard in 2023, is the latest to face the axe.

The looming cuts are not confined to gaming. Earlier this month, reports surfaced that Microsoft was planning to eliminate thousands of roles, particularly in sales. Sources suggest the layoffs are scheduled for early July, right after the company wraps up its fiscal year. Although sales teams are in focus, the final scope and timing of the layoffs could shift.

Back in May, Microsoft laid off around 6,000 employees — mostly from engineering and product departments. Customer-facing teams such as sales and marketing were spared then, but that may change this time around.

The broader strategy behind these job cuts is tied to Microsoft’s aggressive push into artificial intelligence and cloud services. The company is investing heavily in building out data centres and AI infrastructure, and trimming other operations to free up capital.

Cost-cutting also includes operational shifts. In April, Microsoft announced that certain software sales to small and mid-sized businesses would be outsourced to third-party firms — a move that underscores its pivot toward efficiency and emerging technologies.

As of June 2024, Microsoft had 2.28 lakh employees worldwide, with about 45,000 in sales and marketing alone. With such large departments potentially on the chopping block, the upcoming layoffs could be among Microsoft’s most significant workforce overhauls in years.