Microsoft is restructuring its Xbox division, cutting 3,200 jobs—about 20% of the workforce—as part of a broader effort to improve financial performance. CEO Asha Sharma stated that current margins in the gaming segment are below industry standards, prompting the need for significant changes. As part of the reorganization, four game development studios will be sold off, and plans are underway to separate from a fifth. The company aims to streamline operations and refocus on long-term growth and profitability within the competitive gaming market.
This move marks one of the largest workforce reductions in Xbox’s history. The shift reflects Microsoft's strategy to realign its gaming business with stronger financial outcomes. While the layoffs impact a substantial portion of the team, the company emphasized that the restructuring is intended to create a more sustainable and efficient organization. The changes come amid ongoing challenges in the video game sector, where margins and user engagement remain key concerns for major players.