Microsoft is preparing to reduce its workforce by announcing thousands of job cuts across several business divisions, including sales, consulting, and the Xbox gaming unit. The layoffs are expected to begin next week and will affect less than 2.5 percent of the company’s global workforce, which currently includes around 220,000 employees.
The latest round of job reductions comes as Microsoft continues to reshape its business priorities while increasing investment in artificial intelligence. The company is reportedly shifting more resources toward AI infrastructure, including advanced data centres and specialized computer chips, as demand for AI services continues to grow.
The Xbox gaming division is among the areas expected to be impacted. The move follows growing financial pressure within Microsoft’s gaming business. Recently appointed Xbox CEO Asha Sharma told employees that the division needs a major reset, saying the current approach is no longer sustainable.
Microsoft’s latest financial report highlighted the challenges facing its gaming business. The company reported a 7 percent decline in gaming revenue, which fell to $5.3 billion. Hardware sales experienced the biggest drop, declining 33 percent, while revenue from gaming content and services decreased by 5 percent.
In response to these challenges, Microsoft has already increased the prices of its gaming consoles three times within the past year. The company appears to be taking additional steps to improve profitability while adapting to changing market conditions.
This is not the first time Microsoft has reduced its workforce. Last year, the technology giant also announced job cuts and introduced a voluntary retirement program for eligible employees in the United States. The program offered buyout packages to staff members who met specific age and service requirements.
The latest layoffs reflect Microsoft’s long-term business strategy of controlling operating costs while expanding investment in AI technologies. As competition in artificial intelligence continues to grow, the company is focusing more of its spending on innovation and infrastructure, even as it reduces jobs in some traditional business units.
