Microsoft has launched a new round of layoffs, affecting about 500 employees, primarily in the Xbox gaming division, with a small number of positions coming from other units such as cloud and artificial intelligence.

Xbox executive Matt Booty stated in an internal memo that 268 gaming positions are being eliminated, covering Halo Studios, other first-party studios, as well as Xbox gaming studio management and central functions. Together with the actions taken in July and studio divestitures, approximately three-quarters of the previously announced restructuring has been completed.

About 300 people in Washington state are being laid off, with 268 from the gaming side of the company. Two months ago, the company laid off 4,800 employees, about 2.1% of its global workforce, including 605 in Washington, with Xbox immediately cutting about 1,600 positions at that time and planning to reduce gaming positions by another 20% in the current fiscal year.

Since April, Xbox has only used Xbox as its department name, led by Asha Sharma in what is termed a reset. In July, she stated that the business was not healthy, with a goal of reaching about 1 billion daily active users. The company is also moving some studios to operate independently to retain intellectual property and ongoing projects. The global workforce has decreased from about 228,000 to approximately 223,000, marking the first net decrease in a decade.

Last year, the company laid off about 15,000 employees, including about 3,202 in Washington; in June this year, it offered voluntary retirement to about 8,750 eligible employees, with about 30% accepting. HR head Amy Coleman wrote in a July memo that the laid-off positions were not directly replaced by artificial intelligence, but AI is changing the way work is done. At the same time, the company continues to invest hundreds of billions of dollars in AI infrastructure.

The layoffs are part of an event-driven restructuring, not a signal of overall contraction for the group. Buyers continue to price capital expenditures for cloud and AI, while sellers treat the headcount from game acquisitions as a cost item in internal budgets. Funding is shifting from studio salaries and middle management to data centers and model training; the beneficiaries are the cloud and AI divisions designated as growth priorities, while the pressured parties are first-party studios, Xbox central functions, and gaming positions in Washington state.

Source: Public Information