Microsoft has announced a significant reduction in its workforce, with plans to cut approximately 4,800 jobs. This major restructuring initiative will heavily impact the company’s gaming division, which is scheduled to see about 3,200 positions eliminated in the coming fiscal year. The move is part of a broader effort to reduce costs within the Xbox brand, which has faced significant challenges in recent years.
Asha Sharma, the CEO of Microsoft’s Xbox brand who was appointed in February, has described the division’s current business model as “not healthy.” Sharma has expressed a commitment to returning the branch to growth by 2027, noting that the company must avoid the pitfall of mistaking longevity for inevitability. This restructuring follows a series of previous job cuts that have occurred since Microsoft completed its $68.7 billion (€60 billion) acquisition of Activision Blizzard in 2024.
Amy Coleman, Microsoft’s executive vice president, addressed the staff in an internal memo regarding the organizational changes. She emphasized that while the company acknowledges the growing role of automation, the positions being eliminated will not be replaced by artificial intelligence. According to Coleman, the business must evolve because the global landscape is shifting, and while companies cannot dictate industry changes, they must choose to adapt alongside them.
In addition to the workforce reductions, Microsoft intends to increase the prices of its Xbox consoles. This decision aligns the company with competitors like Sony and Nintendo, driven by a surge in component costs that has been exacerbated by the influence of AI across the gaming sector.
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