Microsoft Cuts 4,800 Jobs, Restructures Xbox as AI Investments Surge

Microsoft has announced plans to lay off around 4,800 employees, representing nearly 2.1 percent of its global workforce, as part of a major restructuring of its Xbox gaming division. The company is reorganising its gaming business by closing and spinning off several studios while shifting its focus toward a multi-platform gaming strategy instead of relying solely on Xbox console sales.

The latest layoffs come as Microsoft significantly increases investments in artificial intelligence and cloud infrastructure. Company executives stated that the affected roles are not being replaced by AI, but acknowledged that AI is transforming workplace operations. Microsoft also indicated that additional organisational changes are likely as it continues to prioritise AI-driven growth and operational efficiency.