Microsoft is reportedly preparing for another significant round of layoffs, with the Xbox division among the hardest hit. According to sources cited by Bloomberg, these cuts are expected to be announced early next week—just before the end of Microsoft’s fiscal year on June 30, a time typically reserved for major organisational shakeups.
This would mark the fourth major layoff at Microsoft in the past 18 months, underscoring sustained internal pressure to streamline operations and bolster profitability, particularly after its $69 billion acquisition of Activision Blizzard in 2023.
Key highlights of the development:
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Xbox Division Targeted: Several teams within the Xbox group—including those involved in hardware, game studios, and services like Game Pass—are expected to be affected. Xbox has already undergone multiple rounds of layoffs over the past year, including the closure of some game studios.
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Company-Wide Impact: The layoffs may not be limited to Xbox. Microsoft’s global sales operations and possibly customer-facing roles like sales and marketing, which were largely spared in May’s reported cut of 6,000 roles, may also be impacted this time.
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AI and Cloud Spending Drive Restructuring: Microsoft is investing heavily in AI infrastructure and cloud data centres, which has prompted a reallocation of resources away from legacy departments. To offset these high investment costs, the company is cutting spending in other areas.
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Outsourcing Strategy: In line with cost control, Microsoft has also begun outsourcing software sales for small and mid-sized businesses to third-party firms, reducing reliance on in-house teams.
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Scale of Workforce: As of June 2024, Microsoft employed around 228,000 people worldwide, with 45,000 in sales and marketing—indicating that the upcoming restructuring could affect thousands, depending on its scale.
While the company hasn’t officially confirmed the layoffs, it has repeatedly told investors that it is focusing on “efficiency” and “cost discipline”. This shakeup, especially in the Xbox division, highlights a post-Activision pivot in strategy—away from expansion and toward consolidation.
