Microsoft plans to announce thousands of job cuts across its Xbox sales, consulting and gaming divisions.
The layoffs will begin next week and will affect less than 2.5% of the company’s workforce of about 220,000 employees.
These layoffs come amid growing financial challenges at Xbox. Newly appointed Xbox CEO Asha Sharma told employees that the company “cannot continue as it is” and needs a “reset.”
Microsoft’s most recent filing indicated a 7% decline in gaming revenue to $5.3 billion, including a 33% decline in hardware revenue and a 5% decline in content and services revenue.
Microsoft has already raised console prices three times in a year.
Last year, the tech company even laid off more employees, in part due to a voluntary retirement program launched earlier this year. At the time, the program offered buyouts to U.S.-based employees classified at level 67 or lower, with at least 70 years of combined age and service.
This year, the job cuts signal the company’s broader strategy of redirecting funds from salaries to capital spending on data centers and AI chips.
