Microsoft is reportedly preparing to trim more of its workforce, this time from within its Xbox division, with thousands of employees likely to be affected. According to The Indian Express, managers at Xbox are anticipating major cuts, although an official announcement has not yet been made.
If confirmed, this would be the tech giant’s fourth layoff wave in the last year-and-a-half. Three previous rounds in 2024 had already impacted multiple subsidiaries and teams. The latest round is expected in early July, timed strategically after Microsoft’s fiscal year concludes.
While earlier reports suggested that sales teams might be targeted, The Indian Express notes that these upcoming cuts may extend well beyond just sales.
One factor driving the layoffs is Microsoft's substantial investment in artificial intelligence and data centre infrastructure. The company is channelling billions into building its AI capabilities, prompting a reorganisation across departments — and, with it, workforce reductions.
The pressure on Xbox in particular has reportedly intensified following Microsoft’s acquisition of video game publisher Activision Blizzard in 2023 for a hefty sum of 69 billion dollars. Ever since, the Xbox team has been pushed to raise profit margins and optimise internal operations.
Back in September 2024, Xbox chief Phil Spencer announced that 650 employees were being laid off from the gaming arm. As per the report, those roles were mostly corporate and support-based, and the decision was said to be a result of the post-acquisition team structure.
Then, in May, Microsoft announced another significant downsizing — over 6,000 roles slashed, primarily affecting product and engineering teams. Interestingly, the sales and marketing verticals were spared during that cycle. As of June 2024, Microsoft employed around 2,28,000 people globally, with approximately 45,000 in sales and marketing roles.
The upcoming layoffs are expected to be part of a broader cost-cutting strategy as Microsoft looks to reshape its workforce for future-facing technologies.
More broadly, the tech sector continues to reel under a global layoff wave. As of June 26, 2025, 147 companies had laid off a combined 63,443 employees, according to layoffs.fyi. Among them, chipmaking giant Intel has seen its heaviest layoffs this year — nearly 22,000 jobs, or about 20 per cent of its total workforce, were slashed as it sought to restructure and streamline management.
