Microsoft cuts 4,800 jobs and sells four Xbox studios in sweeping July reset

Microsoft disclosed a July 6 restructuring that will see 3,200 Xbox staff laid off, half of them right away, and an equal number cut in other units, totaling 4,800 jobs or 2.1% of its global workforce. The move accompanies the sale of four development studios—Compulsion Games, Double Fine, Ninja Theory and Undead Labs—while Arkane Studios faces a legally mandated consultation to determine its fate. Xbox leaders Asha Sharma and Matt Booty, who took over earlier in the year, warned that margins were far below industry norms and that revenue had slipped despite heavy investment.

The Communications Workers of America sued Microsoft for alleged unfair labor practices, and workers protested at multiple locations. A network outage on July 27 further highlighted operational challenges, and the division reported a 10% revenue decline for the fourth quarter, with hardware sales down 29% year over year.