Microsoft has announced plans to lay off 4,800 employees, representing approximately 2.1% of its global workforce, in one of its biggest restructuring exercises in recent years. The move is aimed at streamlining operations, improving efficiency and repositioning key business units for long-term growth.
The restructuring will primarily impact the company’s Xbox gaming division, where around 3,200 jobs are expected to be eliminated over the current fiscal year. Microsoft is also spinning off or selling multiple game studios as part of a broader overhaul intended to strengthen the gaming business after years of heavy investment.
According to Microsoft executives, the decision reflects changing market conditions and the need to adapt the business to evolving customer demands. The company said the restructuring is intended to simplify its organisational structure and improve execution, while emphasising that the layoffs are part of a broader business reset rather than direct AI-driven job replacements.
Despite the workforce reduction, Microsoft continues to invest heavily in artificial intelligence, cloud computing and next-generation technologies. The company said it will provide severance benefits and transition support to affected employees as it reshapes its business for future growth.
