Microsoft's Xbox Hit by More Layoffs

Microsoft appears poised for substantial workforce reductions across its gaming division, with reports indicating layoffs could begin as early as next week.

Bloomberg's sources suggest Microsoft will implement "major" job cuts throughout its Xbox operations. According to The Verge, company executives received briefings regarding planned Xbox workforce reductions alongside broader organizational streamlining, with sales teams reportedly facing significant impact.

For its gaming division specifically, The Verge indicates Microsoft aims to implement these changes prior to launching its next-generation consoles. This follows Microsoft's recent announcement of a partnership with AMD to develop processing technology for future Xbox hardware, though the company hasn't disclosed specific launch timelines.

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Additional reporting from The Verge reveals Microsoft is reorganizing its Xbox distribution network in Central Europe, potentially withdrawing operations from certain markets entirely.

Anonymous Microsoft employees speaking to IGN described an atmosphere of impending workforce reductions, characterizing the situation as inevitable rather than speculative.

The context for these anticipated cuts becomes clear when examining Microsoft's restructuring patterns since acquiring Activision Blizzard for $69 billion. The tech giant eliminated 1,900 gaming positions in January 2024, followed by studio closures at Arkane Austin (Redfall) and Tango Gameworks (Hi-Fi Rush) months later. September 2024 saw another 650 gaming positions eliminated, preceding May's sweeping reduction of 6,000 employees (approximately 3% of Microsoft's global workforce).

Xbox chief Phil Spencer explained Microsoft's position during a June 2024 interview with IGN, stating: "Running a sustainable and growing business within Microsoft sometimes requires difficult decisions – choices I don't relish making, but which ultimately fall under my responsibilities."