Microsoft Cuts 4,800 Jobs, Restructures Xbox After 7% Annual Revenue Drop
Updated
Updated · GamesIndustry.biz · Jul 30
Microsoft Cuts 4,800 Jobs, Restructures Xbox After 7% Annual Revenue Drop
3 articles · Updated · GamesIndustry.biz · Jul 30
Summary
4,800 layoffs — 2.1% of Microsoft’s workforce — followed its latest results, with 1,600 cuts at Xbox and FY27 reductions there set to reach 3,200 roles.
Xbox revenue fell 7% for the full year and 10% in the June quarter, as content and services slipped 10% and hardware dropped 29% annually on weaker console sales.
Four studios were reshuffled in the reset: Double Fine and Compulsion became independent, while Undead Labs and Ninja Theory entered talks for new ownership; Arkane Leon began reviewing strategic options.
Microsoft said the overhaul is meant to return Xbox to growth in fiscal 2027, even as the broader company posted $90 billion in quarterly revenue, up 18%, driven by cloud growth.
Are the thousands of recent Xbox layoffs a direct casualty of Microsoft redirecting its capital to feed power-hungry AI datacenters?
With Microsoft sacrificing Xbox studios to fund massive AI expansions, is the tech giant quietly abandoning the console war forever?
As Azure crosses $100 billion, will Microsoft's relentless datacenter spending trigger a massive financial crisis if enterprise AI adoption suddenly stalls?