Microsoft to cut more than 3,000 jobs from ailing Xbox unit
Microsoft has made the difficult decision to cut 3,200 jobs from its Xbox video game business in an effort to address the unit’s struggling performance. The technology giant will immediately eliminate 1,600 positions, with additional job cuts coming as four game development studios exit the Xbox division.
Xbox CEO Asha Sharma, who recently took over the gaming division, acknowledged the challenges facing the business in a memo to employees released by Microsoft. Sharma highlighted that the current state of the business is not sustainable, operating at significantly lower margins compared to similar platform and publishing businesses.
Sharma also pointed out that investments in Game Pass, a subscription gaming service, and multi-platform services have not yielded the expected growth. This, coupled with a weakening core business and the ongoing hardware crisis, has led to the decision to reset Xbox.
Expectations are set for another 1,600 job cuts throughout the fiscal year, as part of Microsoft’s broader effort to reduce labor costs. Chief People Officer Amy Coleman confirmed that the company is cutting a total of 4,800 jobs, representing just over 2% of its workforce.
These layoffs follow voluntary buyouts offered to approximately 8,750 employees back in May, with over 30% of eligible workers accepting the retirement offers. Coleman emphasized that the roles being eliminated will not be replaced by artificial intelligence.
In a separate announcement in June, Microsoft revealed that it will be increasing the prices of its Xbox consoles starting August 1. This decision was attributed to the rising costs of storage and memory components in electronic devices. Consoles with 512 GB of storage will see a $100 price increase, while those with 1 TB of storage will go up by $150.
