Microsoft is eliminating around 4,800 jobs, equivalent to 2.1% of its workforce, in a restructuring that will primarily impact the Xbox video game division and aims to adapt the company to the impact of Artificial Intelligence (AI).
The tech giant justified the decision by citing the need to “align resources, investments, and efforts” within a “fast-evolving technological environment,” stated the company’s head of human resources, Amy Coleman.
The executive emphasized that changes in how technology is developed and utilized are occurring “faster than at any other moment” in the company’s history.
Under this restructuring, the Xbox video game division will be among the hardest hit, losing approximately 20% of its staff.
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The executive director of this department, Asha Sharma, explained in an internal message that around 1,600 layoffs will take effect immediately, while another 1,600 will occur progressively leading up to fiscal year 2027.
“I recognize that a year-long restructuring brings challenges,” Sharma noted.
This workforce reduction is part of a broader transformation process for the tech company, which already carried out multiple rounds of layoffs last year when it eliminated approximately 9,000 jobs.
Microsoft, which saw its shares drop 1.51% following today’s market open, has accumulated losses of around 19% this year alone, as investors question the business impact of generative AI.
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Nonetheless, over recent quarters, the company has posted progress in its cloud computing business and LinkedIn, even as other areas like Windows, Surface devices, and Xbox reported declines in revenue.
