Microsoft to cut 4,800 jobs as it overhauls Xbox
On July 6, 2026, Microsoft announced it will cut about 4,800 jobs, roughly 2% of its global workforce. About 3,200 of those positions will come out of the Xbox gaming division over the next fiscal year. The restructuring goes beyond layoffs: four game studios will be spun off into separate companies or sold, and a fifth will undergo a review that could end in its closure.
AI-processed from Guardian; edited by Hamidun News
On July 6, 2026, Microsoft announced it will cut about 4,800 jobs, roughly 2% of its global workforce, as part of the largest restructuring in the history of its Xbox gaming division.
What's happening at Xbox
About 3,200 of the total cuts will hit the gaming business, and those positions will be eliminated over the next fiscal year. Beyond the layoffs, the restructuring reshapes Microsoft's gaming business itself: four game studios will be spun off into separate companies or sold, and a fifth studio will go through a review that could end in its closure.
- About 4,800 jobs are being cut in total, roughly 2% of Microsoft's global workforce
- About 3,200 of those positions are in the Xbox gaming division
- The Xbox cuts will be spread across the entire next fiscal year
- Four game studios will be spun off into separate companies or sold
- A fifth studio is under review, which could lead to its closure
Why the cuts come amid AI investment
According to The Guardian, thousands of gaming jobs are being cut at the same time Microsoft keeps ramping up its investment in artificial intelligence. The company is reallocating resources: as capital and talent flow toward AI, its traditional gaming business is going through the deepest overhaul in its history.
What it means
The Xbox cuts reflect a broader trend across big tech: capital and staff are shifting toward AI, even at the cost of painfully shrinking business units like gaming that are profitable but rank lower in strategic priority.
FAQ
How many employees will Microsoft cut in total?
The company is cutting about 4,800 positions, nearly 2% of its global workforce. About 3,200 of them are in the Xbox gaming division, and the layoffs will be spread across the entire next fiscal year.
What will happen to Xbox's game studios?
Four studios will be spun off into separate companies or sold, and a fifth is going through a review that could end in its closure.
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Key Questions Answered
How many employees will Microsoft cut in total?
The company is cutting about 4,800 positions, nearly 2% of its global workforce. About 3,200 of them are in the Xbox gaming division, and the layoffs will be spread across the entire next fiscal year.
What will happen to Xbox's game studios?
Four studios will be spun off into separate companies or sold, and a fifth is going through a review that could end in its closure.
What's happening at Xbox?
About 3,200 of the total cuts will hit the gaming business, and those positions will be eliminated over the next fiscal year. Beyond the layoffs, the restructuring reshapes Microsoft's gaming business itself: four game studios will be spun off into separate companies or sold, and a fifth studio will go through a review that could end in its closure. About 4,800 jobs are being cut in total, roughly 2% of Microsoft's global workforce About 3,200 of those positions are in the Xbox gaming division The Xbox cuts will be spread across the entire next fiscal year Four game studios
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