Microsoft Cuts 4,800 Jobs Amid Xbox Revenue Decline
Microsoft is eliminating 4,800 positions across its commercial and Xbox gaming divisions as the gaming unit faces shrinking revenue.
Microsoft announced Wednesday it is slashing 4,800 jobs across its commercial business and Xbox gaming division, marking one of the tech giant's most significant workforce reductions in recent years as its gaming unit grapples with declining revenue.
The cuts hit Xbox particularly hard, with the gaming group also revealing plans to spin off four of its studios — a structural move that signals a broader strategic realignment as Microsoft reassesses how it manages and monetizes its sprawling gaming portfolio following its $69 billion acquisition of Activision Blizzard.
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The downsizing reflects mounting pressure on Microsoft's gaming ambitions. Xbox hardware sales have struggled against Sony's PlayStation, and the company has been working to pivot toward a subscription and cloud-gaming model through Xbox Game Pass. Spinning off studios could indicate Microsoft is looking to shed operational costs while preserving intellectual property relationships.
Microsoft joins a growing list of major tech firms that have pursued aggressive headcount reductions in 2025 as the industry recalibrates after years of pandemic-era over-hiring and as leadership prioritizes AI investment over legacy divisions. The gaming sector broadly has seen thousands of layoffs this year alone across multiple studios and publishers.
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