Microsoft to Cut 4,800 Jobs, Primarily in Xbox Division

WHO:

Techmeme - Microsoft, approximately 4,800 employees, Amy Coleman (executive vice president and chief people officer), Xbox division.

WHAT:

Techmeme - Microsoft is laying off approximately 4,800 employees, which is about 2.1% of its workforce.

The Verge - The layoffs will impact around 1,600 Xbox employees, with plans to eliminate a total of around 20% of Xbox jobs by the end of the financial year.

The Verge - Microsoft cut around 9,100 employees a year prior to this announcement.

The Verge - Microsoft is selling off four Xbox studios and is considering selling another studio.

WHERE:

The Verge - Microsoft’s Xbox division and commercial sales organizations.

WHY:

The Verge - Amy Coleman stated that the job losses are due to a changing technology industry and the need to adjust resources and roles in response to how AI is impacting companies like Microsoft.

The Verge - Coleman emphasized that the roles eliminated are not being replaced by AI, but acknowledged that AI is changing how work gets done.

HOW:

The Verge - Microsoft attempted to avoid layoffs through a voluntary retirement program for US employees whose combined years of service and age total 70 or more.

The Verge - The voluntary retirement package includes five years of access to Microsoft’s healthcare coverage, a lump sum cash severance payment, and six months of vesting for unvested stock options.

The Verge - More than 30% of eligible employees participated in the voluntary retirement program.

(UPDATED July 6, 2026 14:22 UTC)

Microsoft is laying off approximately 4,800 employees, which represents about 2.1% of its workforce, with around 1,600 of those cuts coming from the Xbox division as the company plans to eliminate a total of about 20% of Xbox jobs by the end of the financial year. Amy Coleman, the executive vice president and chief people officer, attributed these job losses to the changing technology industry and the need to adjust resources in response to the impact of AI, although she clarified that the roles eliminated are not being replaced by AI. To mitigate the layoffs, Microsoft offered a voluntary retirement program that saw more than 30% of eligible employees participate, providing them with benefits such as five years of healthcare coverage and a lump sum cash severance payment.