Microsoft is reportedly preparing another wave of layoffs within its Xbox division, marking the latest step in a broader strategic overhaul at the tech giant. According to sources cited by Bloomberg, senior Xbox staff have been informed to brace for significant job cuts expected to roll out next week.
This would mark the fourth major round of layoffs in the Xbox division over the past 18 months. The unit, responsible for gaming hardware and software, has been under sustained internal pressure since Microsoft completed its $69 billion acquisition of Activision Blizzard in 2023. Several smaller game studios under the company’s umbrella have already been shut down in recent months as part of cost-cutting efforts.
While Microsoft has yet to officially comment, the reported cuts come just days ahead of the June 30 fiscal year-end—a time historically associated with major organizational shifts within the company. Analysts say this timing allows Microsoft to enter the new financial year with a more streamlined structure and renewed strategic priorities.
The layoffs are part of a company-wide restructuring initiative, with earlier reports suggesting that thousands of rolesacross global sales teams and other units may also be eliminated in the coming weeks.
In May 2025, Microsoft slashed around 6,000 jobs, primarily targeting product development and engineering roles. Customer-facing departments such as sales and marketing were largely spared at that time.
So far, there is no official confirmation on how many roles will be cut in this latest round or which specific teams within Xbox will be most affected. However, the continued downsizing is expected to impact employee morale, particularly within the Xbox unit, which has already endured multiple waves of layoffs and internal restructuring.
The move underscores Microsoft’s increasing emphasis on profitability and operational efficiency within its gaming division, even as it remains a key pillar of the company’s broader entertainment strategy.
