Summary
- Microsoft is laying off around 6,000 employees, or 3% of its workforce.
- The layoffs affect staff across all levels and departments, including the gaming division.
- Despite job cuts, Microsoft recently reported record earnings and gaming revenue growth.
Layoffs impact thousands across Microsoft
Microsoft has announced another round of job cuts, affecting approximately 3% of its global workforce. Based on the company’s headcount of 228,000 as of June last year, the move equates to around 6,000 employees. The layoffs span across multiple teams, geographies, and levels, including potential impacts on the company’s gaming division.
According to a company spokesperson (via CNBC), the cuts are part of Microsoft’s ongoing efforts to “best position the company for success in a dynamic marketplace.” These layoffs are not performance-related, differentiating them from a smaller, performance-based round of layoffs earlier this year in January 2024.
Gaming teams potentially affected by Microsoft’s Lay Off
While Microsoft has not confirmed which departments are directly affected, reports suggest that its gaming division—which includes Xbox Studios—could be among those impacted. This follows a similar trend from past layoffs: in January 2023, Microsoft cut 10,000 employees, affecting notable gaming studios such as Bethesda Game Studios, 343 Industries, and The Coalition.
In early 2024 alone, Microsoft laid off another 1,900 people across its gaming teams, followed by 650 more in September. This latest wave continues a broader restructuring effort within the company despite strong gaming performance and product releases.
Financial growth amidst restructuring
Ironically, the layoffs come shortly after Microsoft posted strong financials in April. The company reported a 5% increase in gaming revenue and a significant 18% year-on-year boost in net income, with a quarterly profit of $25.8 billion. Despite these figures, the company is looking to streamline operations and reduce what it calls “unnecessary layers” in management, similar to steps taken by other tech giants like Amazon.
CEO Satya Nadella recently addressed the need to adapt during platform shifts, indicating that Microsoft is adjusting its sales execution strategy and realigning focus toward high-growth sectors like AI and next-gen cloud computing.
Conclusion
Despite soaring profits and growing momentum in the gaming space, Microsoft continues to trim its workforce. The latest 3% cut—amounting to roughly 6,000 jobs—signals a broader strategic pivot rather than a sign of trouble. However, questions remain about how these cuts will impact ongoing projects, especially in the Xbox division. All eyes are now on how the company manages growth while optimizing internal structures.
