{"id":3400,"date":"2026-07-07T20:41:40","date_gmt":"2026-07-07T20:41:40","guid":{"rendered":"https:\/\/americanmovershub.com\/?p=3400"},"modified":"2026-07-07T20:41:40","modified_gmt":"2026-07-07T20:41:40","slug":"microsoft-slashes-xbox-workforce-amid-underperforming-role-in-global-ai-race","status":"publish","type":"post","link":"https:\/\/americanmovershub.com\/?p=3400","title":{"rendered":"Microsoft slashes Xbox workforce amid underperforming role in global AI race"},"content":{"rendered":"<div>\n<div>\n<div>\n<div>KEY POINTS<\/div>\n<\/div>\n<div>\n<ul>\n<li>Microsoft announces Xbox will reduce its workforce by 20%.<\/li>\n<li>Overall, the software giant is cutting its global workforce by 4,800 employees.<\/li>\n<li>The cuts come as Microsoft drastically increases investment in AI development.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p>About a month ago, freshly installed Xbox CEO Asha Sharma sent out a notice to employees saying that the company\u2019s $20 billion in investments over the past five years (not including a nearly $70 billion acquisition of hotshot game developer Activision Blizzard), razor-thin profit margins and revenues that have declined by $500 million over the same period represent a trend that \u201ccannot continue\u201d.<\/p>\n<p>Read more <a href=\"https:\/\/americanmovershub.com\/?p=3398\">Americans can join together to celebrate the first public reading of the Declaration of Independence<\/a><\/p>\n<p>On Monday, the Microsoft-owned company that\u2019s celebrating the 25th anniversary of its namesake gaming console later this year announced layoffs aiming to reduce global employee rolls by 20% in the next two years. Those cuts include 1,600 positions announced now and plans for approximately 1,600 further reductions in the coming year. Companywide, Microsoft announced 4,800 layoffs, representing just over 2% of the software giant\u2019s overall workforce.<\/p>\n<p>In an email to employees, Sharma said the reductions were part of an Xbox restructuring effort that launches in the face of challenges within the gaming industry alongside Microsoft\u2019s rising level of investments in artificial intelligence development and underperforming role in the race among tech giants to lead out in the booming AI sector.<\/p>\n<p>\u201cWe are beginning the most significant restructure in Xbox history,\u201d Sharma wrote. \u201cAfter careful consideration, I\u2019ve made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include approximately 1,600 role eliminations today, and in addition, four studios will leave Xbox to new management.\u201d<\/p>\n<h3>How AI is impacting tech layoffs<\/h3>\n<p>A New York Times report notes Microsoft is among a number of big technology companies making workforce reductions while pushing more money toward AI-related endeavors. In April, the company told investors that it expected to spend about $190 billion on capital expenditures for data centers and other infrastructure this calendar year, up more than 60% from 2025, per the Times. But the company\u2019s work force, it said, was likely to shrink.<\/p>\n<p>\u201cThe \u2018why\u2019 is this: Our business is changing because the world around it is changing,\u201d Microsoft chief people officer Amy Coleman wrote in an email to employees Monday. \u201cThe way technology is built, deployed, and used is transforming faster than at any point in my time here.\u201d<\/p>\n<p>Microsoft, which widely promotes its Copilot technology, has lagged behind internet rivals in creating AI tools and services that resonate with users, according to a report from CNBC. That helps explain why its stock price is down 17% this year, trailing all of its megacap peers, including Apple, Amazon and Meta.<\/p>\n<p>Read more <a href=\"https:\/\/americanmovershub.com\/?p=3396\">Deseret News archives: Hoover Dam\u2019s history on the Colorado still being written<\/a><\/p>\n<p>Microsoft\u2019s broader transformation is one being driven by AI, Coleman notes in her email, while both downplaying and underscoring AI\u2019s role in the layoff decisions.<\/p>\n<p>\u201cI also want to be direct that the roles eliminated today are not being replaced by AI,\u201d Coleman wrote. \u201cAt the same time, what\u202fis\u202ftrue is that AI is changing how work gets done.\u201d<\/p>\n<p>In an extensive report on the challenges facing Xbox, Seattle-based tech industry website GeekWire noted Microsoft CEO Satya Nadella has been bluntly acknowledging the need for a fundamental reset after spending years subsidizing Xbox rather than profiting from it. The report notes that videos and livestreams of people playing Xbox games posted to YouTube generate more money than Microsoft makes from the games themselves, according to comments Nadella made during an appearance on the <i>Hard Fork<\/i> podcast.<\/p>\n<p>\u201cNo one can accuse Microsoft of not having invested for the last 25 years,\u201d Nadella said. \u201cAnd now we have to turn this into a sustainable business.\u201d<\/p>\n<p>But some industry watchers have suggested that Microsoft\u2019s quarter-century in the electronic gaming business should rightfully be coming to a close rather than setting course for yet another redo.<\/p>\n<p>\u201cThis is not a business Microsoft needs to be in, or should be in,\u201d DA Davidson analyst Gil Luria told CNBC, referring to Xbox. \u201cIt is very possible that they will spin it off at some point.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/americanmovershub.com\/?p=3394\">July 4 fireworks ignite several fires across Utah<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>How many employees is Microsoft laying off? Why is Xbox cutting jobs? What artificial intelligence in Microsoft developing? <\/p>\n","protected":false},"author":1,"featured_media":3399,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3400","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Microsoft slashes Xbox workforce amid underperforming role in global AI race - American Movers Hub<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/americanmovershub.com\/?p=3400\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Microsoft slashes Xbox workforce amid underperforming role in global AI race - American Movers Hub\" \/>\n<meta property=\"og:description\" content=\"How many employees is Microsoft laying off? 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