Microsoft lays off nearly 5,000 employees across Xbox, commercial sales

AI Summary

Microsoft laid off approximately 4,800 employees (2.1% of its global workforce) on July 6, 2026, with Xbox bearing the brunt of the cuts at 1,600 positions. Xbox CEO Bobbi Sharma described it as "the most significant restructure in Xbox history," citing poor financial health and margins 3�10x below comparable businesses. As part of the restructuring, Xbox will reduce management layers from 14 to as few as three, transition four gaming studios to independent or new ownership, and refocus on core franchises like Minecraft and Candy Crush. Microsoft's Chief People Officer Amy Coleman stated the cuts are not directly replacing workers with AI, though acknowledged AI is transforming how work is done. The layoffs coincide with increased AI spending, including a $2.5 billion investment in enterprise AI deployment. Microsoft noted it has redeployed over 4,000 employees into new roles over the past year. The cuts are part of a broader tech industry trend, with nearly 154,000 jobs lost in the first half of 2026.