Microsoft Job Cuts Hit Xbox Division Again

Significant layoffs are anticipated within Microsoft's gaming division, with reports suggesting the announcement could come as soon as next week.

According to Bloomberg, Microsoft is preparing for "major" job reductions across its Xbox division. The Verge further reported that company managers have been briefed about these Xbox layoffs, in addition to broader company-wide cuts expected to disproportionately affect sales teams.

Regarding the gaming business, The Verge indicated that Microsoft aims to implement these cuts before the launch of its next generation of gaming consoles. This follows last week's announcement of a partnership with AMD to develop the processing power for future Xbox hardware, including first-party consoles. Microsoft has not yet announced a release date for these new devices.

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The Verge also reported that Microsoft is restructuring its Xbox distribution network in Central Europe and will cease operations in certain regions.

Microsoft employees, who requested anonymity to protect their positions, informed IGN that staff are preparing for imminent layoffs, with the prevailing sentiment being that it's a question of "when," not "if."

The context for these concerns is clear. Microsoft has implemented numerous workforce reductions in its gaming division since the monumental $69 billion acquisition of Activision Blizzard. This began with 1,900 job cuts in January 2024, followed months later by the closure of Redfall developer Arkane Austin and Hi-Fi Rush developer Tango Gameworks. In September 2024, Microsoft eliminated an additional 650 roles from its gaming business. A more substantial cut occurred in May of this year, with 6,000 employees, or 3% of its total workforce, being laid off.

In a June 2024 conversation with IGN, Xbox head Phil Spencer commented, "I have the responsibility to run a sustainable and growing business within the company. This sometimes forces me to make difficult decisions—choices I frankly do not enjoy, but which are necessary for the organization's health."