Microsoft Cuts 4,800 Jobs, Shifts From Xbox to $190 Billion AI Push
Updated
Updated · Computerworld · Jul 14
Microsoft Cuts 4,800 Jobs, Shifts From Xbox to $190 Billion AI Push
3 articles · Updated · Computerworld · Jul 14
Summary
4,800 Microsoft employees were laid off last week—just over 2% of the workforce—with Xbox hit hardest as the company starts a broader pullback from gaming.
The cuts came as Microsoft kept AI spending intact, telling investors in April it would spend $190 billion on data centers and other AI infrastructure this year, up 60% from last year.
2,850 gaming jobs will disappear over the next year, and several game studio brands are being spun off or sold, affecting Activision Blizzard and ZeniMax operations.
Xbox had already been under pressure: an internal June memo said more than $20 billion of gaming investment over five years coincided with nearly $500 million in annual revenue decline.
The layoffs extend a year of workforce reductions—6,000 in May 2025, 9,000 later that year, plus about 3,000 voluntary retirements—as Microsoft redirects capital toward AI services and infrastructure.