Microsoft announced on Monday that it will cut 4,800 jobs, representing approximately 2.1% of its global workforce, as part of a restructuring of its Xbox video game division, which includes shuttering up to five studios.
This move by the American tech giant aims to boost revenues following significant investment in the division over the years.
The gaming division restructuring involves eliminating 3,200 positions, with 1,600 employees being laid off starting Monday, according to Reuters.
Despite spending tens of billions of dollars to expand Xbox, including acquiring Activision Blizzard in a major deal, Microsoft has faced challenges in narrowing the gap with Sony's PlayStation and Nintendo, prompting a reevaluation of its gaming sector.
The company has increasingly shifted its strategy towards distributing its games across more platforms rather than relying solely on exclusive games to boost Xbox console sales.
Asha Sharma, the new head of Xbox, informed employees in a memo that the unit's restructuring will include the closure of four studios.
Microsoft's shares declined by 1.4% today after falling approximately 23% during the first six months of 2026, marking the worst first half performance since 2022.