Microsoft cuts 4,800 jobs as Xbox trims 20% of staff

Microsoft is eliminating around 4,800 jobs, with Xbox bearing about 3,200 of those cuts, or roughly 20% of the gaming division’s workforce. Xbox CEO Asha Sharma, who was appointed in February after two years as an AI executive at Microsoft, is using the restructuring to reset the business around its console core after gaming revenue weakened and margins lagged comparable companies. Microsoft’s latest financial report showed quarterly gaming revenue fell 7%, driven by a 33% drop in Xbox hardware revenue and a 5% decline in Xbox content and services. Sharma said Xbox had spread itself too thin under the prior “Xbox everywhere” approach, which pushed the brand beyond consoles into areas such as mobile, even though consoles account for 80% of the business. She is now redirecting resources to that core, while the studios behind Candy Crush and Minecraft will report directly to her. The overhaul also includes divesting four studios and appointing Helen Chiang as Xbox’s first COO. Sharma told employees that Xbox’s operating margins are three to 10 times lower than comparable businesses, underscoring why Microsoft is tightening its gaming strategy even though the division accounts for only 6% of the company’s revenue.