Xbox to cut 3,200 jobs, about 20% of staff, in Microsoft reorganization

Microsoft has announced it will cut about 3200 jobs at Xbox, roughly 20% of its gaming workforce, over the coming year. The layoffs are part of a sweeping reorganization meant to return the company's struggling gaming business to growth.

How many people are losing their jobs

• The cuts will affect about 3200 Xbox employees
• That's roughly 20% of Microsoft's gaming division
• The layoffs will roll out over the coming year rather than all at once
• Journalist Jason Schreier reported the reorganization on Bloomberg Open Interest

Why Xbox is reorganizing

Microsoft's official rationale is to drive growth in a gaming division that has struggled in recent years. For several years now, the company has been shifting its focus away from selling consoles and gaming hardware and toward subscription and cloud services, above all Xbox Game Pass, as well as toward releasing games on multiple platforms, including PlayStation and mobile devices. This isn't the first round of layoffs in Microsoft's gaming division in recent years: the company already cut jobs at Xbox and its studios after its $69 billion acquisition of publisher Activision Blizzard, which closed in 2023.

What's happening across the games industry

The games industry as a whole has been going through waves of layoffs for several years running. Major publishers and studios worldwide are shedding staff as AAA development costs climb, console sales slow, and players shift toward mobile and live-service games. Against that backdrop, Microsoft's move stands out mainly for its scale: the cuts hit nearly a fifth of the entire Xbox division.

What it means

The size of the cut, nearly a fifth of the workforce, shows that even one of the world's largest tech companies doesn't consider its gaming business sustainable in its current form. Microsoft is betting on a leaner structure built around services and multiplatform releases rather than console hardware.