Microsoft prepares for major layoffs in Xbox division amid corporate restructuring

New Delhi: Microsoft is reportedly preparing for another sweeping round of job cuts in its Xbox division, as part of a broader internal restructuring, according to a Bloomberg report citing individuals familiar with the matter.

Senior staff within Xbox have already been alerted to expect substantial redundancies, although the company has yet to issue an official statement on the matter.

This development marks the fourth major layoff within Xbox in the past 18 months, underscoring mounting pressure within the division since Microsoft completed its $69 billion acquisition of Activision Blizzard in 2023, one of the largest deals in the history of the gaming industry.

The most recent layoffs in the gaming unit took place in September 2024, with 650 jobs cut, following an earlier round in January 2024, where 1,900 employees at Activision Blizzard and Xbox were let go. These reductions are widely seen as part of Microsoft’s ongoing efforts to integrate operations and streamline its gaming business post-acquisition.

As of June 2024, Microsoft employed approximately 2.28 lakh people worldwide, with around 45,000 employees working in sales and marketing. The latest round of layoffs is also expected to impact Microsoft’s global sales teams, although the exact number of roles to be eliminated has not yet been disclosed.

Sources within the company say that internal managers have been asked to prepare for a “substantial” workforce reduction. However, there is currently no clarity on which specific teams within Xbox will bear the brunt of these cuts.

Microsoft CEO Satya Nadella has previously clarified that recent layoffs are not linked to individual performance, but rather due to strategic organisational restructuring. In his communications to staff, Nadella emphasised that the changes are necessary to align teams with Microsoft’s evolving priorities, especially its increased investment in artificial intelligence technologies.

More details are expected to emerge next week as the company begins executing the layoffs ahead of its fiscal year-end on June 30.