Microsoft Announces Layoffs and Restructuring in Commercial Sales and Xbox Divisions
Microsoft is undergoing further layoffs as it enters its new financial year, with approximately 4,800 employees being let go, representing about 2.1 percent of its workforce. The majority of the affected employees are from Microsoft's commercial sales business and the Xbox division. The company attributes these job cuts to the evolving technology industry and the impact of AI on its operations.
Amy Coleman, Microsoft's executive vice president and chief people officer, explained in an internal memo that the layoffs are necessary to adapt to the changing landscape influenced by AI. While the eliminated roles will not be replaced by AI, the company acknowledges that AI is reshaping how work is performed. The Xbox division will bear the brunt of the layoffs, with around 8 percent of its workforce affected today and plans to cut a total of approximately 15 percent of Xbox jobs by the end of the financial year.
In addition to the layoffs, Microsoft is divesting four Xbox studios and considering selling another studio as part of its efforts to revamp the Xbox business following a period of challenges. Despite the difficult decisions, Coleman assures employees that the company is committed to minimizing job eliminations and prioritizes reassigning individuals to new roles aligned with Microsoft's strategic priorities and growth areas.