Microsoft Slashes 4,800 Jobs, Citing 'Unhealthy' Gaming Business
The tech giant's Xbox division is significantly impacted as it undergoes a strategic reset amid fierce competition and rising hardware costs.
Microsoft announced on Monday it is eliminating approximately 4,800 jobs, representing about 2.1% of its global workforce. The significant workforce reduction includes a substantial number of employees within its Xbox video game division.
In a memo to staff, Xbox CEO Asha Sharma described the gaming business as "not healthy," operating with margins considerably lower than comparable industry segments. Sharma attributed these challenges partly to a severe "hardware crisis" impacting the gaming industry, characterized by escalating costs for console components. Xbox competes directly with major rivals such as Sony's PlayStation and Nintendo's Switch.
The layoffs, which included 1,600 workers specifically at Xbox, are part of a broader reorganization aimed at "resetting" the division in the face of intense competition. Sharma indicated that further reductions within the gaming sector are anticipated later this year as the company adjusts its strategy.