Overview and Background

Microsoft announced plans to lay off up to 9,100 employees, marking its largest reduction since 2023. This decision, confirmed by the Seattle Times, represents approximately 4% of the company's total workforce. The layoffs will impact various departments, including the gaming sector, specifically affecting roles within the Xbox division and associated studios in Europe, such as King and ZeniMax. The company aims to restructure for better agility and effectiveness in a competitive market.

Key Details

Microsoft's spokesperson stated, “We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace.” The layoffs come despite a significant revenue increase, with Microsoft reporting $70.1 billion in revenue and $25.8 billion in net income in the most recent quarter, reflecting a year-over-year growth of 13% and 18%, respectively.

“To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business,” said Phil Spencer, CEO of Microsoft Gaming.

This marks the fourth round of layoffs in the Xbox division since the previous year, following earlier cuts that affected 1,900 positions in January and 650 in September. The recent layoffs coincide with Microsoft’s strategic shift towards artificial intelligence and cloud services, as the company seeks to streamline operations and reduce management layers.

Key Findings

• Up to 9,100 employees will be laid off, constituting about 4% of Microsoft's workforce.
• The layoffs will affect various teams globally, with significant impacts on the Xbox division.
• Microsoft reported a 13% increase in revenue and an 18% increase in net income in the last quarter.
• This is the fourth round of layoffs within the Xbox division since last year, indicating ongoing restructuring efforts.
• Phil Spencer emphasized the need for organizational changes to prioritize strategic growth areas amid a competitive market.