Microsoft Cuts Thousands Amid Xbox Restructuring Efforts
Microsoft is cutting nearly 4,800 jobs, about 20% of its gaming division Xbox's staff. The move aims to adapt to a rapidly changing industry landscape and is part of a broader restructuring effort across the company.
The 2.1% job cut is not due to automation by AI, according to Amy Coleman, Microsoft's executive vice president and chief people officer. Instead, advanced AI technologies are allowing for more tasks to be automated.
Xbox, led by new CEO Asha Sharma, will undergo significant changes with a goal of boosting its margins. The division is currently operating at 3-10 times lower margins than relevant platforms and publishing businesses. To simplify operations, Xbox plans to reduce its management layers from 14 to no more than five or ideally three.
Four gaming studios, Compulsion Games, Double Fine Production, Ninja Theory, and Undead Labs, will depart from Xbox and fall under new management. The company is also naming Helen Chiang as its first chief operating officer role tied to content, hardware, platform, and services.