Microsoft Plans Job Cuts in Xbox Division
Microsoft is set to initiate further job cuts within its Xbox division as part of an ongoing restructuring of the tech giant. Reports suggest that significant layoffs could occur in the coming week, according to sources familiar with the situation. This marks the fourth time Microsoft has downsized its gaming division over the last 18 months, with several video game studios in the Xbox segment having already shut down earlier this year.
Fox Business reached out to Microsoft for a statement but has yet to receive a response.
Microsoft Admits Xbox’s Struggles Against Competitors
In a recent admission to Nintendo and Sony, Microsoft executives acknowledged that Xbox’s current generation has faced challenges, calling it “The Worst Generation Lost.” The company has been systematically reducing its workforce for the past two years as part of a broader cost-cutting initiative aimed at adapting to what it describes as “dynamic markets.”
In May, Microsoft revealed its plan to lay off nearly 6,000 employees, citing the need to streamline operations, improve efficiency, and reduce management layers to respond more swiftly to changes.
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The layoffs reflect broader changes initiated by Microsoft following an overhiring phase during the pandemic. In January 2023, the company announced a reduction of 10,000 jobs in response to shifts in macroeconomic conditions and evolving customer priorities, as noted in a filing with the Securities and Exchange Commission.
Despite these cuts, Bloomberg reports that the gaming division’s executives are facing increased pressure to enhance profitability, especially following the substantial $69 billion acquisition of Activision Blizzard in 2023.
In addition, Microsoft has navigated a series of legal challenges regarding its acquisition of game developers, including a recent victory over the Federal Trade Commission (FTC), where a federal appeals court dismissed the FTC’s concerns over competition in the gaming market.
