Microsoft to Cut 4,800 Employees Amid Major Xbox Restructuring
Microsoft announced on July 6, 2026, a reduction of approximately 4,800 employees roughly 2% of the company's global workforce. Of these, about 3,200 jobs will be eliminated from the Xbox gaming division during the next fiscal year: four game studios will be spun off into separate companies or sold, while another will undergo review that could result in closure.
AI-processed from Guardian; edited by Hamidun News
On July 6, 2026, Microsoft announced the elimination of approximately 4,800 employees — roughly 2% of the company's global workforce — as part of the most extensive restructuring of its Xbox gaming division in its history.
What's Happening with Xbox
Out of the total number of cuts, approximately 3,200 positions will affect the gaming division specifically and will be eliminated over the course of the next fiscal year. Beyond layoffs, the restructuring will impact the structure of Microsoft's gaming business itself: four gaming studios will be spun off into separate companies or sold, while another studio will undergo a review process that could result in its closure.
- Total of approximately 4,800 positions being cut — roughly 2% of Microsoft's global workforce
- Approximately 3,200 of those positions are in the Xbox gaming division
- Xbox cuts are spread across the entire next fiscal year
- Four gaming studios will be spun off into separate companies or sold
- A fifth studio is undergoing a review that could lead to its closure
Why Cuts Are Happening Amid AI Investment
According to The Guardian, thousands of gaming division positions are being eliminated at the same time Microsoft is ramping up investments in artificial intelligence. The company is reallocating resources: while capital and talent flow toward AI-related areas, the traditional gaming business is undergoing its deepest restructuring in its history.
What It Means
The Xbox cuts illustrate a broader trend in major technology companies: capital and workforce resources are shifting toward AI-focused areas even at the cost of painful contraction in profitable but strategically less prioritized business units like the gaming division.
Frequently Asked Questions
How many employees will Microsoft cut in total?
The company is cutting approximately 4,800 positions — nearly 2% of its global workforce, with approximately 3,200 of those in the Xbox gaming division, with layoffs spread across the next fiscal year.
What will happen to Xbox gaming studios?
Four studios will be spun off into separate companies or sold, while another undergoes a review process that could result in its closure.
Want to stop reading about AI and start using it?
AI News is a curated feed of AI/tech news. Hamidun Academy teaches you to use AI systematically in your work.
The AI world, distilled — once a week
Seven stories that actually mattered, hand-picked. No noise, no reposts, no press releases.
Done! Check your inbox for a confirmation.