Microsoft has laid off about 4,800 employees as it opens a new fiscal year, according to reporting on comments from HR chief Amy Coleman, who told staff the cuts reflect how "our business is changing." Coverage aggregated via MSN puts the figure at roughly 2.1% of Microsoft's global workforce, with the Xbox gaming division and commercial sales absorbing the heaviest blows.
The restructuring is being framed around artificial intelligence. ABC News reports the company's message to workers that "AI is changing how work gets done," and NDTV describes the move as the latest wave of AI-led job cuts across the tech industry.
Gaming is the most visible casualty. Ars Technica reports that five studios and about 3,200 employees are affected within the gaming unit — roughly 20% of the division — as Xbox refocuses on its biggest franchises. Engadget, by contrast, reports an additional 3,200 jobs cut beyond the gaming division, underscoring that the pain extends well past games.
As part of the shake-up, The Verge reports Microsoft is spinning off four Xbox studios: Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs. Notably, two of them going independent — Double Fine and Compulsion — will get to keep their franchises and back catalogs, a relatively rare arrangement when studios are cut loose.
Why it matters: one of the world's most valuable companies is reshaping itself around AI while retreating from parts of its gaming ambitions, a signal that even highly profitable tech giants are willing to trade headcount and studios for a leaner, AI-centered future.