Microsoft announces 4,800 layoffs, Xbox faces downsizing
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Tech giant Microsoft has announced a global layoff of 4,800 employees, which accounts for approximately 2.1% of the company's total workforce. The gaming division, Xbox, is bearing the major brunt of this workforce trimming.
In a message sent to employees, Microsoft’s Executive Vice President, Amy Coleman, stated that this step was taken to place greater emphasis on customer demands in a rapidly changing market.
As a result of this new decision, over 1,600 positions are being instantly eliminated from Xbox. In a note sent to employees, the newly appointed CEO of Xbox, Asha Sharma, referred to this as the largest restructuring in Xbox's history.
In the note, which was shared on the social media platform X, Asha Sharma indicated that an additional 1,600 employees from Xbox will lose their jobs within the next year.
As part of this restructuring process, four game development studios under Microsoft—Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs—are being separated from Xbox.
However, Asha Sharma remains optimistic about the future of Xbox. She said, "The purpose of this change is not to make Xbox smaller, but rather to take steps toward a bigger future."
Highlighting the changing demands of customers, Microsoft's Amy Coleman said that companies have no way of preventing market shifts. A company can only choose whether or not it will adapt to these changes.
"Laid-off workers are not being directly replaced by artificial intelligence. However, it is true that AI technology is changing the familiar nature of human work," Amy Coleman clarified.
Microsoft's announcement comes at a time when the global gaming industry is going through a difficult period. Many studios have yet to recover from the shock of massive layoffs over the past few years.
Asha Sharma described the company's latest layoff announcement as highly painful. She stated that there was a need to reorganize Xbox's entire content portfolio, platform, and other operations.
Tech analyst Paolo Pescatore said the layoff announcement could be a significant shock for the company, and this plan now faces major challenges ahead.
According to Paolo Pescatore, "Reducing costs is not Microsoft's only challenge right now. Rather, their main task will be to precisely define Xbox's core position in the market during this era of consoles, PCs, cloud, and subscriptions." (Source: BBC)
