Microsoft cuts 4,800 jobs, including many in Xbox division
WARN Act gives advance notice of upcoming mass layoffs
The labor law, which has gone viral on social media, gives workers a heads-up about impending layoffs ? and the information is open to the public.
EDMOND, Wash - Microsoft announced it is cutting nearly 5,000 jobs, including a large number of workers at its Xbox video game business.
Microsoft cuts jobs
By the numbers:
According to a statement, the technology corporation is cutting 4,800 jobs, or about 2.1% of its global workforce.
The layoffs include 1,600 Xbox workers with more to come this year.
Microsoft said the move is part of a broader reorganization designed to "reset" Xbox as it faces heightened competition.
"Our business today is not healthy," said a memo from Xbox CEO Asha Sharma, who took over the gaming division earlier this year. "We are operating at margins that are 3-10x lower than comparable platform and publishing businesses."
A view of the Microsoft corporate logo in front of the Microsoft Office building on 41st street and 8th avenue on July 19, 2024 in New York City. (Credit: Craig T Fruchtman/Getty Images)
Sharma said the industry, in which Xbox competes with Sony's PlayStation and Nintendo's Switch, is facing a severe "hardware crisis" as costs soar for console components.
She said to expect another 1,600 job cuts over the course of the fiscal year that began last week.
The company will also spin off four video game development studios previously acquired by Microsoft.
Microsoft offered voluntary buyouts
The backstory:
The layoffs followed voluntary buyouts that Microsoft began offering to 8,750 people in May.
The software giant's chief people officer, Amy Coleman, said Monday that more than 30% of eligible workers accepted the voluntary retirement offers.
Layoffs come amid rise of AI, cuts to funding
Big picture view:
The news comes as the rise of AI and automation are changing staffing needs.
In May, Meta Chief Executive Officer Mark Zuckerberg blamed AI and capital spending for recent layoffs and said more could be coming.
RELATED: 2026 layoffs: List of companies cutting jobs this year
Last month, Johns Hopkins University said it had laid off more than 100 employees, citing cuts in federal research funding.
The Source: This story was reported from Los Angeles. The Associated Press, previous FOX Local reporting contributed.