Microsoft cuts 4,800 jobs, restructures Xbox amid AI investments

Microsoft will lay off 4,800 employees, mainly in Xbox, due to AI investments and restructuring. The move aims to cut costs and address financial pressures in the tech sector.

Microsoft has announced the layoff of around 4,800 employees, representing 2.1% of its global workforce. This decision comes as the company increases its investment in artificial intelligence and undergoes internal restructuring to optimize expenses. The Xbox division will be particularly impacted, with nearly one-fifth of its staff affected. Microsoft is also considering separating four video game development studios, potentially making them independent once again. These changes are driven by financial pressures, especially the high costs of AI infrastructure, and a need to improve profit margins, as Xbox's margin has dropped to 3%. Microsoft clarified that these layoffs are not direct replacements by AI, but acknowledged that automation is changing the nature of work. This move reflects a broader trend in the tech industry, where companies are reducing their workforce to adapt to rapid AI adoption and meet investor demands for efficiency and profitability.