Microsoft Lays Off 9,000 Employees, Impacting Xbox and Sales Divisions in Largest Job Cut in Years
Microsoft has announced another round of mass layoffs, affecting approximately 9,000 employees—its largest workforce reduction in over two years and the second significant layoff in recent months. The cuts, which began Wednesday, are hitting the company’s Xbox gaming division, global sales teams, and other departments as part of what Microsoft calls “organizational changes” aimed at adapting to a “dynamic marketplace.”
Roughly 830 of the layoffs are tied to Microsoft’s headquarters in Redmond, Washington, according to a notice filed with state authorities. Overall, the company stated the cuts impact about 4% of its workforce, which stood at 228,000 full-time employees as of June 2024.
A memo from Xbox CEO Phil Spencer emphasized that the gaming division is “positioning for long-term success” by streamlining operations and removing layers of management to enhance agility. These layoffs come just months after Microsoft’s May cuts of 6,000 employees, primarily in software engineering and product management roles—fueling concern that the rise of AI-driven coding tools could be reducing the demand for human programmers.
Despite the cutbacks, Microsoft continues to pour investment into cloud computing and artificial intelligence. The company has forecasted $80 billion in infrastructure spending to support its AI growth in the coming fiscal year.
CFO Amy Hood previously stated the company is prioritizing “high-performing teams” and reducing managerial layers to boost efficiency. However, analysts say the latest layoffs primarily affect slower-growth segments like Xbox and reflect efforts to refocus on high-return areas like AI and the cloud.
The layoffs follow major acquisitions in the gaming sector, including the $75.4 billion purchase of Activision Blizzard and the earlier $7.5 billion acquisition of ZeniMax Media. As a result, many employees across Xbox’s global studios are now facing job losses, with developers taking to social media to share layoff announcements and begin new job searches.
