Microsoft to cut thousands of jobs, Xbox to be hit hard

Microsoft plans to cut approximately 4,800 jobs, mainly within its Xbox division, which is facing competitive challenges against Sony's Playstation 5. Specifically, 3,200 gaming operations positions will be eliminated to reduce costs amid a struggling performance. The Xbox brand's CEO, Asha Sharma, described the division as 'not healthy' and indicated that prices for Xbox consoles will likely increase due to rising component costs influenced by the AI boom. This will be part of their strategy to adapt to ongoing changes in the industry.

dw.com home - Made for minds

In focus

Ukraine USA World Cup

Latest audio Latest videos

Live TV Search DW

External link — share this page with Facebook External link — share this page with X / Twitter

External link — share this page with Reddit External link — share this page with EMail External link — share this page with Facebook messenger External link — share this page with Whatsapp External link — share this page with Telegram External link — share this page with Linkedin External link — share this page with SMS

https://p.dw.com/p/5GgLQ

Copy link

A Microsoft store in Shanghai, China on July 24, 2025 Microsoft will carry out another round of job cuts as its Xbox Series X console faces challenges on the consumer market against Sony's Playstation 5 (FILE: July 24, 2025) Image: CFOTO/picture alliance

Microsoft will cut some 4,800 jobs, including the largest overhaul in its gaming brand Xbox, the company said.

Approximately 3,200 jobs will be cut from the company's gaming operations in the coming fiscal year.

The move is meant to cut costs in the Xbox division, which has been struggling in recent years.

According to Microsoft's Amy Coleman, the company's executive vice president, the jobs that will be cut will not be replaced by AI, despite accepting the role automation has across the company.

"Our business is changing because the world around it is changing," Coleman wrote in a memo to Microsoft employees, adding that companies do not choose whether their industry changes, but they rather "only get to choose whether they change with it."

Console prices to rise

Explaining the move, CEO of Microsoft's Xbox brand Asha Sharma called the division's business "not healthy."

Sharma was appointed CEO in February, promising to return it to growth by 2027.

According to Sharma, Xbox will not become one of the companies that "mistake longevity for inevitability."

Since its acquisition of Activision Blizzard in 2024 for $68.7 billion (€60 billion), Xbox has gone through several rounds of cuts.

The company will also follow its competitors Sony and Nintendo in raising Xbox consoles' prices due to the component-cost surge fueled by AI that affects the gaming industry.

How AI boom is impacting Latin America, US

To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video

07:31

Edited by: Wesley Dockery

Don't let the algorithm hide the news. If you rely on our team for trusted reporting, please take a moment to select us as your Preferred Source on Google by clicking here and hitting the "star" or "preferred" button, so you'll always see our verified news first.

Skip next section More on Technology from North America

Microsoft to cut thousands of jobs, Xbox to be hit hard

Console prices to rise

How AI boom is impacting Latin America, US

More on Technology from North America

Your posts could block your US entry

US lifts restrictions on Anthropic's advanced AI models

US allows partial release of Anthropic's Mythos AI model

More on Technology from around the world

Google must pay record €4.1 billion fine, top EU court rules

Sony to stop making PlayStation game discs as of 2028

Will Germany impose an age limit for social media?

Related topics