Woofun AI reports that Microsoft is reducing its global workforce by 4,800 positions, representing approximately 2.1% of its total employees. The Xbox division faces the most significant impact, with 1,600 layoffs executed on July 6 and another 1,600 scheduled for this fiscal year, totaling roughly 3,200 job losses. Xbox CEO Asha Sharma disclosed that the business unit is currently unhealthy, citing profit margins three to ten times lower than comparable platforms and rising console component costs intensifying competition against Sony and Nintendo.

The company will also divest four acquired studios: Compulsion Games and Double Fine will operate independently, while Ninja Theory and Undead Labs will be transferred to new owners. This move partially reverses the gaming ecosystem established by the $68 billion Activision Blizzard acquisition three years ago. Chief Human Resources Officer Amy Coleman noted that a buyout plan launched in April saw over one-third of eligible employees accept offers. Microsoft’s stock price has declined approximately 19% over the past six months.