Microsoft is eliminating approximately 4,800 jobs company-wide, with 3,200 cuts targeting its Xbox gaming division. This is the most significant restructuring in Xbox's history.
Half of the gaming cuts, about 1,600 positions, took effect immediately. The rest will occur as Microsoft divests or spins off four gaming studios, with a fifth under review for potential closure.
The move comes after Microsoft's $68.7 billion acquisition of Activision Blizzard. Xbox CEO Asha Sharma stated the division's profit margins are 3 to 10 times lower than comparable businesses, calling the situation a necessary reset.
The restructuring occurs as Microsoft directs major capital toward artificial intelligence, forcing all non-AI initiatives to compete harder for resources.