Microsoft plans ‘substantial’ job cuts across Xbox division

Microsoft is planning another round of cuts at Xbox as part of the tech giant’s ongoing reorganization.

Xbox managers are expecting substantial job cuts across the entire group as soon as next week, people familiar with the matter told Bloomberg. This marks the fourth time Microsoft downsized its gaming division in the past 18 months, the outlet reported. Several video game studios at the company’s Xbox division were shuttered in 2024, too.

FOX Business reached out to Microsoft for comment.

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The company has been shedding its workforce over the past two years as part of a larger cost-cutting effort in which the company has been implementing organizational changes it believes are necessary to position it for success “in a dynamic marketplace.”

The company told FOX Business in May, when it announced plans to lay off nearly 6,000 employees, that it was looking to streamline its processes, procedures and roles and decrease management layers to move more quickly and boost efficiency. 

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The layoffs began in 2023 when the tech sector began trying to rightsize itself after over-hiring during the pandemic. In January 2023, Microsoft said it was cutting 10,000 jobs “in response to macroeconomic conditions and changing customer priorities,” according to a filing with the Securities and Exchange Commission. 

However, executives in the tech giant’s gaming unit have been under particular pressure to increase its profitability after the company’s $69 billion acquisition of Activision Blizzard in 2023, according to Bloomberg. 

Microsoft faced a significant number of legal hurdles in its bid for the “Call of Duty” maker. In May, it won its latest legal battle against the Federal Trade Commission (FTC) after a federal appeals court rejected the FTC’s legal challenge that a merger would restrict competition.