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Microsoft cuts 4,800 jobs, including many at Xbox in a ‘reset’ of its gaming division

Jul 6, 2026, 7:49 AM

FILE - A man walks past the Xbox logo at the Microsoft booth during the E3 game show in Los Angeles...

FILE - A man walks past the Xbox logo at the Microsoft booth during the E3 game show in Los Angeles, Tuesday, June 11, 2013. (AP Photo/Jae C. Hong, File)
Credit: AP Photo/Jae C. Hong

(AP Photo/Jae C. Hong, File)

Associated Press's Profile Picture

BY ASSOCIATED PRESS


REDMOND, Wash. (AP) — Microsoft is cutting 4,800 jobs, about 2.1% of its global workforce, including a large number of workers at its Xbox video game business.

The layoffs included 1,600 Xbox workers, with more to come this year in a broader reorganization designed to “reset” Xbox as it faces heightened competition, the company said Monday.

“Our business today is not healthy,” said a memo from Xbox CEO Asha Sharma, who took over the gaming division earlier this year. “We are operating at margins that are 3-10x lower than comparable platform and publishing businesses.”

Sharma said the industry, in which Xbox competes with Sony’s PlayStation and Nintendo’s Switch, is facing a severe “hardware crisis” as costs soar for console components.

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Microsoft cuts 4,800 jobs, including many at Xbox in a ‘reset’ of its gaming division