Another Wave of Major Layoffs at Microsoft Hits Xbox Division
Microsoft has announced another round in its ongoing series of mass layoffs for 2025. According to the company’s statement, up to 9,100 employees are being let go. This figure represents approximately 4% of Microsoft’s global workforce of around 228,000.
The Microsoft Gaming and Xbox departments have been significantly impacted by these layoffs. However, the exact breakdown of which teams are affected and by how much has not yet been clarified.
Shake-Up at Xbox: “We are ending or reducing work in some areas”
In an internal memo sent to employees, Head of Xbox Phil Spencer stated the following:
“To prepare the Gaming division for long-term success and to focus on strategic growth areas, we are ending or reducing work in some business lines. We also aim to increase agility and efficiency by simplifying management layers.”
Spencer emphasized that these decisions had to be made during a period when player numbers, engagement, and content planning are at historic highs. However, he noted that “difficult decisions must be made today to ensure continued success in the years to come.”
A Continuation of Cuts Since 2024
This latest move is the most recent in a series of workforce reductions, which includes the layoff of 1,900 employees from Activision Blizzard and Xbox in January 2024, the complete closure of several studios in May, the dismissal of 1,000 employees from the HoloLens and Azure teams in June, and the reduction of 650 roles within the Xbox division in September.
Official Statement from Microsoft
The company provided a formal explanation for the changes:
“We continue to implement the necessary organizational and workforce adjustments to prepare the company and our teams for success in a dynamic market.”
This process was described as part of Microsoft’s broader strategy of organizational streamlining and focus. The HR department will provide affected employees with benefits such as severance pay, health insurance, and outplacement support. It was also announced that these individuals would be given priority consideration for open positions within the company.
This is a Developing Story
More details on which departments are most affected by the layoffs are expected to be released in the coming days. For now, the available information strongly suggests that the gaming division is one of the hardest-hit areas.
For Microsoft, 2025 is shaping up to be a year defined by both the broader downturn in the gaming industry and the company’s own internal process of realigning its priorities.