Microsoft plans to announce thousands of job cuts across its Xbox sales, consulting and gaming divisions.
The layoffs will begin next week and will affect less than 2.5% of the company’s workforce, or around 220,000 people.
These layoffs come amid growing financial difficulties at Xbox. New Xbox CEO Asha Sharma told employees that the company “cannot continue as is” and needs a “reset.”
Microsoft’s most recent filing showed a 7% drop in gaming revenue, to $5.3 billion, including a 33% drop in hardware revenue and a 5% drop in content and services revenue.
Microsoft has already increased console prices three times in one year.
Last year, the tech company even laid off more employees, in part due to a voluntary retirement program launched earlier this year. At the time, the program offered buyouts to U.S.-based employees ranked at level 67 or below, with at least 70 years of combined age and service.
This year’s job cuts reflect the company’s broader strategy of redirecting funds from salaries to capital spending on data centers and AI chips.
