Microsoft cuts 4,800 jobs in major Xbox overhaul

In early July 2026, Microsoft announced it is cutting about 4,800 jobs, with a large portion of the cuts hitting its Xbox gaming division. The layoffs are part of what the company calls a "significant restructure" and "reset" of Xbox, including selling off several Xbox game studios and shrinking the unit's overall size.

The job cuts affect sales teams and the Xbox division broadly, with some reports saying more than 3,000 of the layoffs are in Xbox alone. Microsoft is also divesting five studios as it refocuses its gaming strategy. The move adds to a wave of tech layoffs that have continued into 2026.