Microsoft is cutting 4,800 jobs, or 2.1% of its workforce, on July 6, with its Xbox gaming division eliminating 3,200 roles through fiscal 2027, including 1,600 on the same day.

The 2.1% figure implies a base of about 228,000 employees, matching Microsoft’s reported full-time headcount as of June 30, 2025.

A person familiar with the matter said the Xbox cuts amount to about one-fifth of the division’s staff. The cuts come as Microsoft said additions to property and equipment rose by US$16.4 billion in fiscal 2024, partly due to new data centers and computer systems for AI demand.

Chief people officer Amy Coleman said four gaming studios will split from Microsoft, and commercial teams that work with customers will also face cuts.

Compulsion Games and Double Fine will become independent again, while Ninja Theory and Undead Labs have agreed to join new owners.

State of Decay 3 is still expected in 2027 under new ownership, while Arkane’s Blade project faces uncertainty.

Arkane Studios, based in France, is consulting its works council on strategic options.

The move follows earlier Xbox layoffs of 1,900 people in early 2024 and 650 in September 2024.

🔗 Source: CNBC