Microsoft has laid off nearly 5,000 employees, with the majority coming from Xbox and commercial sales. The company is restructuring to position itself for long-term success, with a focus on delivering enterprise AI deployments.
The layoffs will hit Xbox particularly hard, with 1,600 staffers losing their jobs. According to Asha Sharma, CEO of Xbox, this is the most significant restructure in Xbox history, with the business currently operating at margins 3-10x lower than comparable platform and publishing businesses.
As part of the shift, Microsoft will transition four of its gaming studios to operate under new management, ensuring preservation of intellectual property and ongoing projects. Xbox is also flattening its management structure, cutting the current 14 management layers to no more than five.
