Microsoft has announced plans to cut 4,800 jobs, representing about 2.1 per cent of its global workforce, with its Xbox gaming division among the hardest hit.
The latest round of layoffs includes approximately 1,600 employees from the Xbox business, and the company has warned that additional job cuts are likely later this year as part of a broader restructuring effort.
According to Microsoft, the reorganisation is aimed at “resetting” the Xbox division as it grapples with mounting competition in the gaming industry.
In a memo to employees on Monday, July 6, Xbox Chief Executive Officer Asha Sharma, who assumed leadership of the gaming business earlier this year, acknowledged the challenges facing the division.
“Our business today is not healthy,” Sharma wrote. “We are operating at margins that are three to 10 times lower than comparable platform and publishing businesses.”
She attributed the company’s struggles in part to a worsening hardware crisis affecting the gaming industry, where Xbox competes with Sony’s PlayStation and Nintendo’s Switch.
According to Sharma, rising costs for console components have significantly increased pressure on the business, prompting Microsoft to undertake the restructuring in an effort to improve its long-term competitiveness.
