Microsoft mulls 4th major layoff round in 18 months
What's the story
Microsoft is preparing for another round of layoffs, this time targeting its Xbox division. The move comes as part of a larger company-wide restructuring plan. This would be Microsoft's fourth major layoff round in 18 months, amid increasing pressure to focus on profitability following its $69 billion acquisition of Activision Blizzard in 2023.
Impact assessment
Layoffs expected to be significant
The impending layoffs will affect several teams within the Xbox group, sources familiar with the matter told Bloomberg. While it's unclear how many jobs will be cut, the step is expected to be significant. The restructuring effort could also extend to employees in Microsoft's global sales operations. An official announcement about these layoffs is likely this week, ahead of Microsoft's fiscal year-end on June 30.
Previous cuts
Xbox division has already seen job cuts
The Xbox division, which oversees Microsoft's gaming consoles, game development studios, as well as digital services like Game Pass, has already witnessed several layoffs in the past year. In 2023 alone, the firm closed some of its gaming subsidiaries and made many staffing changes within Xbox. Now that the Activision Blizzard acquisition is complete, the company seems to be re-evaluating its structure and cost strategy for this gaming arm.
Broader firings
Thousands of jobs might be cut elsewhere too
The upcoming layoffs aren't just confined to gaming. Earlier this month, Bloomberg reported that the firm is planning to cut thousands of jobs across various departments, including sales. In May, it reportedly laid off around 6,000 workers, mostly from engineering and product teams. Customer-facing roles such as sales and marketing were largely unaffected during that phase but could be targeted this time around.
Financial strategy
Microsoft wants to streamline spending
Microsoft's cost-cutting measures come as the company invests heavily in artificial intelligence (AI) and cloud infrastructure. The tech giant has invested billions into building data centers and AI-powered services. To fund these areas, Microsoft is looking to streamline spending in other parts of its business.