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Microsoft Cuts 4,800 Jobs, Restructures Xbox With 3,200 Total Reductions
Microsoft eliminated about 4,800 positions on Monday, equal to 2.1 percent of its global workforce. The Xbox unit absorbed 1,600 of the cuts as part of a broader overhaul that includes studio divestitures and management flattening.
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Microsoft cut around 4,800 roles on Monday, July 6, 2026, representing 2.1 percent of its global workforce, TechCrunch reported. The reductions fell most heavily on the Xbox division and commercial sales teams. Xbox lost 1,600 staffers in the round.
The company expects about 3,200 total job cuts in the Xbox unit through fiscal year 2027. Amy Coleman, executive vice president and chief people officer, stated in a memo that the business is changing because the world around it is changing. She added that the roles being eliminated today are not being replaced by AI, though AI is changing how work gets done.
Microsoft also launched the Frontier Company business unit focused on enterprise AI deployments, backed by a $2.5 billion investment. Asha Sharma, chief executive of Xbox, described the moves as the most significant restructure in Xbox history. She stated that the business today is not healthy and is operating at margins 3 to 10 times lower than comparable platform and publishing businesses.
As part of the changes, Compulsion Games and Double Fine Productions will return to independent studios. Ninja Theory and Undead Labs are coming under new ownership. Xbox is reducing management layers from 14 to no more than five, ideally three.
Helen Chiang is becoming chief operating officer of Xbox with end-to-end profit and loss authority. Over the past year, Microsoft redeployed more than 4,000 employees into new roles, including 500 in July 2026, Coleman said.
