Microsoft cuts 5,000 jobs globally, restructures Xbox division

Microsoft announced a global workforce reduction of roughly 4,800 positions, about 2.1% of its total staff, as part of a broad cost‑efficiency drive and a shift toward artificial‑intelligence priorities. The layoffs heavily target the Xbox gaming segment, with around 3,200 jobs cut and 1,600 employees dismissed immediately.

The company also said it will spin off several Xbox studios: Compulsion Games and Double Fine Productions will become independent, while Ninja Theory and Undead Labs will be separated into new operating models. Arkane Studios, known for the Dishonored series, is negotiating with the French workers' union over its future. These moves follow years of heavy investment in gaming, including the Activision Blizzard acquisition, but Xbox still trails competitors Sony and Nintendo. The layoffs come as major technology firms increase AI spending, estimated to exceed $700 billion this year, prompting tighter cost controls.

The restructuring affects employees in multiple locations, notably the French office in Issy‑les‑Moulineaux, and reflects Microsoft's broader strategy to improve profitability across its divisions.