Microsoft announces fresh round of 4,800 job cuts across sales and Xbox

After laying off about 9,100 employees earlier this year, Microsoft is carrying out another round of job cuts as it begins its new financial year. The software giant is now planning to lay off around 4,800 employees, representing roughly 2.1 percent of its workforce. Most of the affected roles are in Microsoft's commercial sales business and the company's Xbox division.

Amy Coleman, Microsoft's Executive Vice President and Chief Operating Officer, attributed the layoffs to the changing technology landscape and the company's need to realign resources, roles, and operating priorities. According to a report by The Verge, an internal memo also clarified that the positions being eliminated are not being replaced by AI.

More from Tech

The latest round of layoffs is expected to affect around 1,600 Xbox employees, with a further reduction of approximately 205 Xbox roles planned by the end of the financial year. Microsoft is also reportedly shutting down four Xbox studios and is considering the sale of another as it looks to restructure its gaming business after years of challenges.

Voluntary retirement program to reduce layoffs

Microsoft has also been attempting to limit compulsory layoffs through a voluntary retirement program. US employees whose age and years of service totaled at least 70 were eligible to participate. The package includes five years of healthcare coverage, a lump-sum severance payment, and six months of accelerated vesting for unvested stock awards.

“More than 30 percent of eligible employees chose to participate in our recent voluntary retirement program, and we will continue exploring similar approaches in the future,” Coleman said. “While this doesn’t change the difficulty of today’s news, we will continue to do everything we can to create opportunities for our people, reduce the need for job eliminations where possible, and responsibly support those affected with care and respect.”

In July last year, Microsoft had announced sweeping layoffs affecting around 9,000 employees across multiple divisions, with the Xbox team among the hardest hit. The job cuts came as the tech giant outlined plans to significantly ramp up its investments in artificial intelligence, including spending $80 billion on data centres to train and deploy AI models. At the time, the layoffs accounted for roughly 4 percent of Microsoft's global workforce of around 228,000 employees, according to the BBC.