Microsoft announced the elimination of about 4,800 jobs, roughly 2.1% of its global workforce, as part of another cost-cutting and efficiency drive amid the era of artificial intelligence. The most significant impact is expected in the Xbox gaming division, which will lose about a fifth of its employees at Microsoft.
Amy Coleman, Microsoft’s Executive Vice President and Chief People Officer, wrote to employees that the company is operating in a period of exceptionally rapid technological change, at a pace not seen since its founding decades ago.
According to her, these changes require both the organization and its employees to adapt to a new reality and continuously develop their professional skills.
Coleman emphasized that artificial intelligence is not the direct cause of the layoffs and is not replacing employees leaving the company. However, she said the technology is fundamentally changing work methods and the skills required of Microsoft employees.
Meanwhile, EVP and CEO of Xbox, Asha Sharma, informed employees that the division will cut about 3,200 jobs by the end of fiscal year 2027, with 1,600 already eliminated. She said that spreading the process over a long period does create uncertainty, but it is necessary in order to complete the organizational changes gradually.
Sharma added that Xbox management expects the division to return to a growth trajectory after completing the restructuring process in 2027.