Microsoft plans to announce thousands of job cuts across its sales, consulting, and Xbox gaming divisions.
The layoffs will start next week, affecting less than 2.5% of the company’s workforce of around 220,000.
These layoffs occur 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 most recent filing indicated a 7% decline in gaming income to $5.3 billion, including a 33% decline in hardware revenue and a 5% decline in content and services revenue.
Microsoft has already increased console prices three times within a year.
Last year, the tech company even laid off more employees, partly due to a voluntary retirement program launched earlier this year. Back then, the program offered buyouts to U.S.-based employees ranked at level 67 or below, with at least 70 combined years of age and service.
This year, the job cuts indicate the company’s broader strategy of redirecting funds from salaries to capital expenditure on AI data centres and chips.
