Microsoft is cutting 3,200 jobs in divisions outside of Xbox today, primarily targeting the business segment of the organization. These layoffs come on top of a large but expected wave of layoffs that also hit Microsoft’s Xbox branch on Monday, July 6.
Amy Coleman, Microsoft’s executive vice president and chief human resources officer, announced the business layoffs in a blog post: “During my time at Microsoft, I have seen this company reinvent itself over and over again. What has made this possible has always been our people: their resilience, their creativity and their willingness to continue learning. »
Microsoft is now laying off 4,800 people across Xbox and other divisions, equivalent to 2.1% of its global workforce. Although Coleman made it clear that AI would not immediately replace the jobs of eliminated employees, she hinted that it could and probably would happen in the near future.
“I also want to be clear that the roles being eliminated today are not being replaced by AI,” Coleman wrote, apropos of nothing. “At the same time, what’s true is that AI is changing the way work gets done. Some of the tasks we do every day can now be automated, which means we all need to continue to learn, develop new skills, and adapt as work evolves.”
We knew the Xbox layoffs and studio sales were coming, but the additional loss of 3,200 non-gaming employees came as a surprise on Monday.
In the case of Xbox, Microsoft laid off 1,600 employees today and is preparing for 1,600 more layoffs in the coming months. In addition, it creates four studios – Compulsion Games, Double Fine, Ninja Theory and Undead Labs – and potentially closes a fifth, Arkane.
Xbox employees have been bracing for layoffs since a worrying memo sent by new CEO Asha Sharma and COO Matt Booty on June 10. They wrote that after a decade of massive studio acquisitions and poor sales of current-generation hardware, the Xbox division was overextended and losing money. Sharma reiterated these sentiments more forcefully in a blog post officially announcing the Xbox layoffs on July 6.
A week before the job cuts, members of the Communications Workers of America’s Xbox union urged Microsoft to engage in good faith negotiations over job security and layoff processes. Microsoft laid off 9,000 people across its divisions in July 2025, including hundreds of Xbox employees, and laid off 1,900 Xbox employees in early 2024.
