Microsoft cuts 4,800 jobs, including many at Xbox in a 'reset' of its gaming division

July 8, 2026 - 02:41

REDMOND, Wash. -- Microsoft has announced it is laying off 4,800 employees, a move that represents roughly 2.1% of its total workforce. The cuts are hitting the company's Xbox video game division especially hard, as part of what executives are calling a strategic reset for the gaming unit.

The layoffs come as the tech giant looks to streamline operations after a period of rapid expansion. The Xbox segment, which has seen significant investment in recent years through acquisitions and new content deals, is now facing a realignment of priorities. While Microsoft did not specify exactly how many of the 4,800 jobs are tied to gaming, sources close to the matter indicate that the cuts are concentrated heavily within the Xbox team.

This is not the first round of reductions for Microsoft's gaming arm. The company previously let go of around 1,900 workers in its gaming division earlier this year, following the completion of its massive $69 billion acquisition of Activision Blizzard. That deal, the largest in video game history, brought popular franchises like Call of Duty and Candy Crush under Microsoft's umbrella.

The latest job cuts are described as a reset, suggesting that Microsoft is reassessing its structure and spending in the gaming sector. The company is also reportedly closing several smaller studios and canceling some in-development projects as part of the shakeup. Employees affected by the layoffs were notified on Thursday, and severance packages are being offered to those leaving the company.