Fourth Round of Microsoft Layoffs 2025: Windows Company to Cut Jobs in Xbox Division, Gaming & Sales Teams

Microsoft Corporation, a global technology giant best known for its Windows operating system, is planning to lay off a substantial number of employees from its Xbox division as part of a broader company-wide restructuring exercise. Founded in 1975 and headquartered in Redmond, Washington, Microsoft employs over 220,000 people globally and is among the most valuable companies in the world.

According to a Bloomberg report, the latest round of job cuts is expected to be announced early next week, just before the end of Microsoft's fiscal year on June 30, 2025. While the exact number of layoffs has not been disclosed, sources familiar with the matter suggest that the cuts will be significant and will impact multiple teams, especially within the Xbox division and global sales operations.

Job Cut in Microsoft XBox Division

The Xbox division plays a central role in Microsoft's consumer and gaming business. It is responsible for the development and sales of Xbox gaming consoles, managing in-house game development studios, and overseeing digital gaming services, including the popular Xbox Game Pass subscription platform. The layoffs are expected to affect these core areas, although details of specific departments or regions have not yet been made public.

Fourth Round of Layoff in Microsoft

This will be Microsoft's fourth major workforce reduction in the past 18 months. In May 2025, the company announced layoffs affecting around 6,000 employees, representing roughly 3% of its total global workforce. The most notable job cuts took place after Microsoft's $69 billion acquisition of Activision Blizzard in 2023. In January 2024, Microsoft laid off 1,900 employees from Activision Blizzard and Xbox-related teams. This was followed by another 650 job cuts within the Xbox unit in September 2024.

Industry observers note that Microsoft has been under increased internal and external pressure to integrate its large gaming acquisitions efficiently and to control operational costs. The acquisition of Activision Blizzard, home to blockbuster gaming franchises like Call of Duty, Diablo and World of Warcraft added a substantial number of new employees and overhead to Microsoft's gaming ecosystem.

As of June 2024, Microsoft had a global workforce of approximately 228,000 employees, including around 45,000 professionals in sales and marketing roles. The company has been evaluating overlapping functions and team structures to better align with evolving strategic priorities.

In past internal communications, CEO Satya Nadella emphasised that these layoffs are not related to employee performance but are a result of strategic restructuring. He stated that Microsoft is realigning its teams to better support long-term goals, with a strong emphasis on artificial intelligence, cloud computing, and emerging technologies. Nadella also reassured employees that the decisions are being made with a focus on future growth and business sustainability.