Microsoft plans fresh layoffs, Xbox and sales teams likely to be hit
Microsoft is reportedly preparing for another round of layoffs, with its Xbox division among the key departments expected to be affected, media reorts said.
The move is said to be part of a broader company-wide restructuring effort ahead of the financial year-end.
If confirmed, this would mark the fourth major layoff at the tech giant in the past 18 months, coming at a time when Microsoft faces increasing pressure to prioritise profitability following its $69 billion acquisition of Activision Blizzard in 2023.
This wave of job cuts may also go beyond the gaming vertical.
Bloomberg earlier reported that Microsoft is considering slashing thousands of roles across departments, including sales.
In May, the company had already cut around 6,000 jobs, mostly affecting engineering and product teams, while sparing most customer-facing roles such as sales and marketing.
However, those roles may now be on the chopping block.
One of the key drivers behind these cost-cutting efforts is Microsoft’s ongoing push into artificial intelligence and cloud infrastructure.
The company has committed significant capital to build data centres and expand its AI-powered offerings. To offset these high-cost investments, it is attempting to rein in spending in other parts of the organisation.
In line with this strategy, Microsoft has also begun outsourcing some business functions.
In April, it informed employees that software sales for small and medium-sized businesses would be shifted to third-party vendors, underscoring its intent to streamline operations and focus internal resources on future-facing areas like AI.
As of June 2024, Microsoft had 2.28 lakh employees globally, including about 45,000 in sales and marketing roles.
Given the scale of the organisation and the breadth of functions reportedly being considered for cuts, the upcoming round of layoffs is expected to be one of the largest internal reshuffles the company has seen in recent times.
While the company hasn’t officially confirmed the layoffs, it has previously stated that it continually evaluates workforce alignment with long-term priorities.
Microsoft’s recent communication with investors and employees has repeatedly pointed to a tighter focus on operational efficiency and a commitment to limiting non-essential spending.
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