Microsoft to cut 4,800 jobs as Xbox undergoes its biggest overhaul
On July 6, 2026, Microsoft announced it would cut about 4,800 employees, roughly 2% of its global workforce. Around 3,200 of those positions will disappear from the Xbox gaming division over the next fiscal year. Four game studios will be spun off into separate companies or sold. A fifth will go through a review that could end in its closure.
AI-processed from Guardian; edited by Hamidun News
On July 6, 2026, Microsoft announced it would cut about 4,800 employees, roughly 2% of its global workforce, in the largest restructuring of its Xbox gaming division in the unit's history.
What is happening at Xbox
About 3,200 of the total cuts will fall on the gaming side, and those positions will be eliminated over the next fiscal year. Beyond layoffs, the restructuring will change the structure of Microsoft's gaming business itself: four game studios will be spun off into separate companies or sold, and one more studio will enter 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 them are in the Xbox gaming division
- The Xbox cuts are 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 jobs in the gaming division are being cut just as Microsoft keeps ramping up its investment in artificial intelligence. The company is reallocating resources: while capital and talent flow toward AI-related areas, the traditional gaming business is going through the deepest restructuring in its history.
What it means
The Xbox cuts illustrate a broader trend at large tech companies: capital and staff are shifting toward AI, even at the cost of painfully shrinking profitable but strategically lower-priority business units such as gaming.
Frequently asked questions
How many employees will Microsoft cut in total?
The company is cutting about 4,800 positions, nearly 2% of its global workforce. Around 3,200 of them are in the Xbox gaming division, and the layoffs are spread across the entire next fiscal year.
What will happen to the Xbox game studios?
Four studios will be spun off into separate companies or sold, and one more 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. Around 3,200 of them are in the Xbox gaming division, and the layoffs are spread across the entire next fiscal year.
What will happen to the Xbox game studios?
Four studios will be spun off into separate companies or sold, and one more is going through a review that could end in its closure.
What is happening at Xbox?
About 3,200 of the total cuts will fall on the gaming side, and those positions will be eliminated over the next fiscal year. Beyond layoffs, the restructuring will change the structure of Microsoft's gaming business itself: four game studios will be spun off into separate companies or sold, and one more studio will enter 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 them are in the Xbox gaming division The Xbox cuts are spread across the entire next fiscal year Four game studios wi
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