Microsoft lays off 4,800 employees, including 600 in Washington

Microsoft laid off 4,800 employees Monday, including 600 in Washington, where the company is headquartered (Redmond).

The cuts impacted roles across sales, consulting, and the Xbox gaming division. The layoffs accounted for approximately 2.1% of its workforce.

Amy Coleman, the executive vice president and chief people officer for Microsoft, said in an internal memo to employees, according to GeekWire, that the layoffs are a consequence of the “changing technology industry” and the “need to adjust resources and roles and shift how we operate” to respond to AI’s impact on the company.

“I also want to be direct that the roles eliminated today are not being replaced by AI,” the memo read, according to GeekWire. “At the same time, what is true is that AI is changing how work gets done.”

Microsoft employs roughly 220,000 people across the globe. The company eliminated approximately 15,000 positions just last year — 6,000 layoffs in May 2025 and another 9,000 layoffs in July 2025.

Roughly 1,600 of the 4,800 job cuts were a part of the company’s Xbox division, with more Xbox layoffs to come in the next few months. According to Xbox CEO Asha Sharma, this is a part of the biggest restructuring in the gaming console’s history.

Microsoft’s layoffs came promptly after its fiscal year ended on June 30.

Xbox faces thousands of layoffs this summer as new CEO orders gaming division ‘reset’

Microsoft’s Xbox division is undergoing significant layoffs this summer as the gaming department undergoes a “reset.”

First reported by Bloomberg, Xbox is expected to lose 3,200 jobs in total — 20% of the department’s workforce — including 1,600 jobs Monday.

The reports of upcoming layoffs come just months after Asha Sharma became the latest CEO of Xbox in February. Xbox executives stated that it has invested more than $20 billion over the past five years, while revenue has declined by approximately half a billion. According to Sharma, Xbox needs to rethink its portfolio in the coming weeks and months.

A significant portion of Xbox’s employees work at the Microsoft campus in Redmond. It is unknown how many Puget Sound-area employees will be affected by the upcoming layoffs, as of this reporting.

Microsoft raises Xbox prices amid looming summer layoffs

Microsoft is raising the prices on its Xbox consoles starting August 1, with the cheapest version climbing to $500.

This price jump comes after multiple reports cited that significant layoffs will hit the company in early July, after Microsoft’s fiscal year ends on June 30.

The Xbox Series S console is now $500 retail for devices with 512GB of storage, a $100 increase. For Series S consoles with 1 TB of storage, the price is now $550, $100 more than what it was previously listed at.

For Xbox Series X consoles, the 1 TB all-digital version costs $750 (a $150 increase), while the 1 TB disc drive costs $800 (a $150 increase). Despite these significant price jumps, Microsoft is also planning to release a brand-new console, currently dubbed Project Helix, in 2027 for the next generation of gaming. With the Series S and Series X both releasing in 2020, these prices are for consoles at the end of their projected life cycles.

The prices of Xbox consoles jumped less than 12 months ago, in Sept. 2025.

Apple is making similar moves, raising prices on MacBooks and iPads by up to $300.

Both companies point to a global shortage of memory and storage chips, driven in part by booming demand for AI. Industry analysts say the higher costs could spread across more everyday tech products.

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