Microsoft lays off 4,800 staff amid AI-driven restructuring

Microsoft is laying off 4,800 employees, mainly from Xbox, amid 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, as part of a broader internal restructuring and increased investment in artificial intelligence. The Xbox division will be particularly impacted, with nearly one-fifth of its staff affected. Additionally, Microsoft is considering separating four video game development studios, allowing them to become independent once again. These measures are driven by financial pressures, including the high costs of AI infrastructure and the need to optimize corporate expenses. Xbox's profit margin has dropped to just 3%, prompting a strategic review of its operations and structure. 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 wider trend in the tech industry, where companies are cutting staff to adapt to rapid AI adoption and meet investor demands for greater efficiency and returns.