Microsoft layoffs: Xbox team reportedly faces new wave of cuts amid strategic overhaul

Microsoft is reportedly preparing to carry out another significant round of layoffs within its Xbox division next week, as part of a broader internal shake-up across the company.

According to a Bloomberg report, individuals familiar with the matter, senior staff within Xbox have been informed to expect widespread redundancies across the department. The company has not yet issued an official statement regarding the reported cuts.

Reportedly, this upcoming round marks the fourth major workforce reduction within Xbox over the past 18 months. In addition to previous layoffs, Microsoft has shuttered several gaming subsidiaries, signalling continued pressure on the gaming unit to streamline operations and improve profitability.

The Xbox division, responsible for the development of gaming hardware and software, has reportedly been under increasing scrutiny from Microsoft's leadership since the tech giant completed its $69 billion acquisition of Activision Blizzard Inc. in 2023.

While Bloomberg News had earlier reported Microsoft’s intention to reduce thousands of roles across its global sales teams, the impending cuts within Xbox appear to be part of a company-wide restructuring effort timed with the end of the firm’s fiscal year on 30 June.

Microsoft has a history of initiating major organisational changes in the weeks leading up to its fiscal close. Analysts suggest this strategy enables the company to enter the new financial year with a leaner structure and revised strategic focus.

The decision, while not yet officially confirmed, is expected to impact morale within Xbox, which has already faced multiple waves of job losses and internal re-alignments.

As of now, there is no clarity on the exact number of roles to be eliminated or the specific teams within Xbox that may be most affected.

In May, Microsoft carried out a significant wave of job cuts, affecting approximately 6,000 employees, about three per cent of its global workforce. The layoffs primarily targeted roles in product development and engineering, while positions in customer-facing departments like sales and marketing were largely unaffected.

(With inputs from Bloomberg)