Microsoft’s Executive Vice President, Amy Coleman, said the company is restructuring to focus more on business areas that deliver the greatest value to customers, as the technology industry continues to evolve rapidly.
The latest round of layoffs will affect around 1,600 employees working within the Xbox division. Xbox President Asha Sharma informed staff that the changes mark the beginning of one of the most significant transformations in the division’s history. She also revealed that an additional 1,600 Xbox employees are expected to lose their jobs over the next year as the restructuring continues.
As part of the overhaul, four Xbox game studios—Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs—will be separated from Microsoft as the company reshapes its gaming business.
“These changes are about redefining Xbox’s future, making it a stronger and more focused organization rather than a smaller part of the company,” Sharma told employees.
Coleman said the restructuring is intended to ensure Microsoft keeps pace with the rapid transformation of the technology sector, particularly as artificial intelligence increasingly reshapes how businesses operate and how work is performed.
The company expects that, within a year, it will have laid off a total of about 9,000 employees, with the resulting cost savings being redirected toward investments in AI infrastructure, research, and product development.
The layoffs reflect a broader trend across the technology industry, where major companies are streamlining operations while investing heavily in artificial intelligence. Microsoft has emerged as one of the world’s leading AI investors through its products and strategic partnerships, making AI a central pillar of its long-term growth strategy.
Founded in 1975 by Bill Gates and Paul Allen, Microsoft is headquartered in Washington State, United States, and employs more than 200,000 people worldwide.
