Microsoft Lays Off Hundreds in Washington Gaming Division Reboot

Microsoft's gaming division is undergoing significant changes after laying off hundreds of employees in Washington state. The latest round of layoffs, announced on Tuesday, affects around 300 workers based in Washington, with about 268 of those being part of the gaming team. This move comes just two months after Microsoft cut over 4,800 gaming and sales team members companywide, including 605 in Washington.

The company has been trying to control its workforce growth for more than a year due to rising costs from ongoing AI development and a significant expansion during the COVID-19 pandemic. Last year, Microsoft laid off 15,000 employees worldwide, with 3,202 of those based in Washington state. The company's global workforce shrunk from 228,000 to 223,000 employees last year, marking its first overall decline in a decade.

The layoffs are part of Xbox CEO Asha Sharma's plan to turn around the struggling gaming division. In February, Sharma took over from long-time Microsoft veteran Phil Spencer, who retired after leading the Xbox team for nearly four decades. After 100 days on the job, Sharma sent a memo to gaming employees outlining her intention to overhaul the division.