Microsoft plans to announce thousands of job cuts across its sales, consulting and Xbox games divisions.
The layoffs will start next week and affect less than 2.5% of the company’s workforce of about 220,000.
These layoffs come amid growing financial challenges at Xbox. The newly appointed CEO of Xbox, Asha Sharma, told employees that the company “cannot continue as is” and needs a “reset”.
Microsoft’s latest filing indicated a 7% drop in gaming revenue to $5.3 billion, including a 33% drop in hardware revenue and a 5% drop in content and services.
Microsoft has already increased console prices three times within a year.
Last year, the tech company even laid off several employees, partly because of a voluntary retirement program launched earlier this year. At the time, the program offered buyouts to US-based employees ranked at level 67 or below, with at least 70 combined age and service.
This year, the job cuts show the company’s broader strategy to redirect funds from salaries to capital spending on AI data centers and chips.
