Microsoft cuts about 4,800 jobs as Xbox and sales teams take brunt
The reductions equal about 2.1% of Microsoft’s workforce, with Xbox facing deeper cuts through the end of the financial year, The Verge reported.
By Hana Yoshida · Markets Reporter
3 min read
Microsoft is cutting about 4,800 jobs as it starts a new financial year, The Verge reported Monday. The move matters because the reductions hit two major parts of the company: its Xbox division and its commercial sales organization.
The layoffs amount to about 2.1% of Microsoft’s workforce, according to The Verge. The report said most of the affected employees work in commercial sales or in Xbox.
The cuts come about a year after Microsoft eliminated roughly 9,100 positions, The Verge reported. The new round adds to a broader reset inside parts of the company as Microsoft adjusts staffing and business priorities.
Memo points to AI-driven changes in work
In an internal memo cited by The Verge, Amy Coleman, Microsoft’s executive vice president and chief people officer, tied the layoffs to changes in the technology business and to the company’s need to shift resources, roles and operating practices.
Coleman also addressed the role of artificial intelligence in the decision. “I also want to be direct that the roles eliminated today are not being replaced by AI,” Coleman wrote, according to The Verge. “At the same time, what is true is that AI is changing how work gets done.”
The memo framed the decision as part of Microsoft’s response to how AI is affecting companies like Microsoft, The Verge reported. Coleman said Microsoft is looking for ways to reduce the need for job eliminations, according to the report.
“Decisions like these are never easy, and you have my commitment that we are constantly looking for ways to reduce the need for job eliminations,” Coleman wrote, according to The Verge.
Xbox faces a larger planned reduction
The Verge reported that Microsoft is cutting about 8% of Xbox jobs in the current round. The company plans to eliminate a total of about 15% of Xbox roles by the end of the financial year, according to the report.
Microsoft is also selling four Xbox studios and is considering selling another, The Verge reported. The studio moves are part of what the report described as an effort to reset the Xbox business after years of struggles.
The Verge said the Xbox division is among the areas most affected by the layoffs, alongside Microsoft’s commercial sales operation. The company’s internal explanation, as reported, links the broader cuts to changing work patterns and the need to move resources into different areas.
Microsoft has not been reported in The Verge’s account as saying that AI directly replaced the eliminated roles. Coleman’s memo instead said AI is changing how work is performed, while the affected roles are being cut as part of a broader shift in how Microsoft operates.
This story draws on original reporting from The Verge.