Microsoft Plans Major Xbox Layoffs Next Week

Microsoft is planning major layoffs in its Xbox gaming business as early as next week.

Timing aligns with fiscal year end. The job cuts could be announced as early as next week. Bloomberg reports the layoffs will occur sometime after June 30, when Microsoft's fiscal year ends.

Managers within Xbox are expecting substantial cuts across the entire group. The company declined to comment on the plans.

This marks the fourth major round in 18 months. The upcoming cuts follow three major layoffs last year and the closure of several subsidiaries. Xbox produces video-game hardware and software.

Pressure to improve profit margins since Activision Blizzard deal. Xbox has been under pressure from Microsoft executives to boost profit margins since purchasing Activision Blizzard Inc. for $69 billion in a deal that closed in 2023. The video-game division’s latest round of layoffs is expected next week after the end of Microsoft’s fiscal year on June 30.

New CEO Asha Sharma addresses business health. The layoffs come shortly after new Xbox CEO Asha Sharma admitted the business "isn't particularly healthy." In an email sent to employees on Wednesday, Sharma emphasized that annual revenue had declined nearly half a billion over the last five years despite more than $20 million in investment.

Part of broader company reorganization. Microsoft is also planning thousands of job cuts that will impact other parts of its businesses. This will be part of a company-wide reorganization.