Microsoft lays off nearly 5,000 employees across Xbox, commercial sales
TechCrunch • • general
Key Points:
- Microsoft announced layoffs of approximately 4,800 employees, representing 2.1% of its global workforce, with Xbox and commercial sales divisions most affected; Xbox alone will lose 1,600 staffers.
- Amy Coleman, Microsoft's EVP and chief people officer, emphasized that the cuts are not directly due to AI replacing jobs, but acknowledged AI is changing work processes, requiring employees to adapt and reskill.
- Xbox CEO Asha Sharma described the layoffs as the most significant restructuring in Xbox's history, citing poor business health, low margins, and industry-wide hardware challenges as reasons for the reset.
- As part of the restructuring, Xbox will reduce management layers from 14 to ideally three, appoint Helen Chiang as COO with full profit and loss authority, and shift focus to core franchises like Minecraft and Candy Crush while transitioning some studios to new management.
- The layoffs coincide with Microsoft's increased investment in AI, including the $2.5 billion Frontier Company initiative, reflecting a broader tech industry trend of workforce reductions alongside growing AI development and commercialization.
