Microsoft Axes Thousands Amid AI Shift

Microsoft is making significant changes to its workforce as part of its ongoing shift towards artificial intelligence (AI). The tech giant plans to cut approximately 4,800 jobs, which represents about 20% of its gaming division Xbox's staff. This restructuring will impact the entire company, with a focus on adapting to the changing industry landscape.

Ashley Coleman, Microsoft's executive vice president and chief people officer, emphasized that this reduction in workforce is not solely due to AI automation. While advanced technologies are indeed increasing efficiency, human employees still play a crucial role in various aspects of the business.

Xbox will be particularly affected by these changes, with 3,200 employees set to leave their positions over the course of 2027. The division is experiencing lower margins than its competitors and major publishing businesses, which has prompted Microsoft's leadership to reassess its gaming strategy.