Microsoft has cut an additional 3,200 jobs outside its Xbox division, bringing the total layoffs to 4,800 on a single day. The reductions primarily target the organization's Commercial Business segment, as announced by EVP and Chief People Officer Amy Coleman in a company blog post. Coleman stated that the eliminated roles will not be immediately replaced by artificial intelligence, but hinted that automation could take over in the near future. "Some of the tasks we do every day can now be automated, and that means we all need to keep learning and adapting," she wrote.
Breakdown of cuts: 1,600 Xbox layoffs and 3,200 in Commercial Business
Today's layoffs include 1,600 employees from the Xbox division, with an additional 1,600 cuts expected in the coming months. Xbox also announced the spin-off of four studios: Compulsion Games, Double Fine, Ninja Theory, and Undead Labs, while a fifth studio, Arkane, may be shuttered. Tensions had been building since new CEO Asha Sharma and COO Matt Booty sent an internal memo on June 10, citing overexpansion after a decade of acquisitions and poor hardware sales. These sentiments were reiterated forcefully on July 6, the day the Xbox cuts were officially announced.
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While Microsoft reduces headcount, other tech companies are expanding AI tools for workers. For instance, Anthropic has expanded Claude Cowork to web and mobile, showing how AI is becoming more integrated into daily work. Coleman emphasized that the eliminated roles were not replaced by AI, but added that "AI is changing how work gets done."
Context of Microsoft layoffs: a multi-year trend
These cuts follow a series of workforce reductions. Last July, Microsoft laid off 9,000 employees across all divisions, including hundreds of Xbox staff. In 2024, 1,900 Xbox employees were let go. The Communications Workers of America union, representing some Xbox workers, urged Microsoft to negotiate in good faith on job security but to no avail. The decision to cut 4,800 positions represents 2.1% of the global workforce, and further measures are possible in the coming months.
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For a deeper look at tech industry layoffs, refer to the Wikipedia page on Microsoft layoffs, which provides a detailed timeline. Meanwhile, the Commercial Business segment braces for a reorganization that could reshape the Redmond giant's strategic priorities.
Source: https://www.engadget.com/2208855/microsoft-layoffs-extend-beyond-xbox
