Next week will be witness to more layoffs at Microsoft. This round of job cuts will affect the Xbox division but the exact number of people that will be let go is not known yet. However, media reports expect this round of layoffs to be the largest in the past year and a half.
These job cuts are part of a restructuring exercise happening across the company, which could also impact teams looking after global sales operations.
The maximum brunt is expected to be borne by the Xbox division, which is responsible for Microsoft’s gaming consoles, digital services (including Game Pass) and game-development studios. This is not the first time that the Xbox division has witnessed layoffs.
In January 2025 Microsoft had initiated a round of layoffs that impacted employees across various departments. This followed an earlier decision to lay off 10,000 employees in early 2023, in a move aimed at responding to evolving market conditions. In January 2024, Microsoft’s gaming division had eliminated 1,900 positions, streamlining roles following its $75.4 billion acquisition of Activision Blizzard.
In April of 2025 Microsoft had got more serious than ever with the performance of its employees. The software giant decided to eliminate low performers, and how! The low performers were given two options—to either improve by being part of a performance-improvement plan or depart. At the time, Microsoft had also decided not to rehire such underperforming employees for two years! There would be no internal transfers for these employees either, it had said. Then, in May, the company reportedly cut about 6,000 jobs, primarily affecting its engineering and product teams.
The software giant had also started to outsource some functions recently. Clearly, Microsoft is determined to bring down operational costs even while focusing more on investing in artificial intelligence (AI).
