Microsoft cuts 4,800 jobs, including Xbox division, in 'significant restructure'

Microsoft announced on Monday, July 6, 2026, a global workforce reduction of approximately 4,800 employees, representing about 2% of its total staff, as part of a significant company-wide restructuring effort. This overhaul notably impacts its Xbox gaming division, alongside reductions in commercial sales and consulting operations.

The Xbox division is facing a substantial "reset," with 1,600 immediate job cuts and an anticipated total of around 3,200 positions to be eliminated throughout the current fiscal year, equating to roughly 20% of its workforce. Additionally, four game studios are being spun off or sold, while a fifth is under review for potential closure, as the company addresses the division's described "unhealthy" business and low profit margins.

This broader restructuring aims to control operating costs and adapt to rapid technological shifts, including increased automation from artificial intelligence. Microsoft's executives indicated that these changes are necessary to prioritize strategic growth areas and maintain long-term success amid ongoing investments in AI infrastructure.