Microsoft announced layoffs affecting approximately 4,800 employees, representing about 2.1% of its workforce, as part of a restructuring of its commercial and Xbox businesses, with shares declining by 1.5% in early trading. This move aligns Microsoft with other tech companies reorienting towards AI infrastructure, although Chief People Officer Amy Coleman clarified that the eliminated roles are not being replaced by AI but are part of a broader resource realignment and structural adjustment to company priorities. The gaming division, Xbox, is specifically undergoing restructuring due to a 3% slump in profit margin, exacerbated by rising memory chip prices forcing Xbox console price increases amid already soft demand, with the division's head noting a nearly half-billion dollar annual revenue decline over the past five years despite significant investment.

Microsoft announced layoffs affecting approximately 4,800 employees, representing about 2.1% of its workforce, as part of a restructuring of its commercial and Xbox businesses, with shares declining by 1.5% in early trading. This move aligns Microsoft with other tech companies reorienting towards AI infrastructure, although Chief People Officer Amy Coleman clarified that the eliminated roles are not being replaced by AI but are part of a broader resource realignment and structural adjustment to company priorities. The gaming division, Xbox, is specifically undergoing restructuring due to a 3% slump in profit margin, exacerbated by rising memory chip prices forcing Xbox console price increases amid already soft demand, with the division's head noting a nearly half-billion dollar annual revenue decline over the past five years despite significant investment.

Microsoft announced layoffs affecting approximately 4,800 employees, representing about 2.1% of its workforce, as part of a restructuring of its commercial and Xbox businesses, with shares declining by 1.5% in early trading. This move aligns Microsoft with other tech companies reorienting towards AI infrastructure, although Chief People Officer Amy Coleman clarified that the eliminated roles are not being replaced by AI but are part of a broader resource realignment and structural adjustment to company priorities. The gaming division, Xbox, is specifically undergoing restructuring due to a 3% slump in profit margin, exacerbated by rising memory chip prices forcing Xbox console price increases amid already soft demand, with the division's head noting a nearly half-billion dollar annual revenue decline over the past five years despite significant investment.

Announcing yet another layoff in the tech sector, Microsoft is letting go of around 2.1 per cent of its workforce, which is roughly 4,800 jobs. ,

The decision comes after the tech giant is restructuring its commercial and Xbox businesses. During the early trading sessions, the company's shares were down 1.5 per cent. With the announcement, Microsoft joined other tech leaders in a wave of layoffs as they shift their priorities towards AI infrastructure.

As per Reuters, in a memo to employees, Chief People Officer Amy Coleman said AI was changing how work gets done by automating some routine tasks, but said the layoffs were part of a broader effort to realign resources and operating structures with the company's priorities. "I also want to be direct that the roles eliminated today are not being replaced by AI. At the same time, what is true is that AI is changing how work gets done."

Previously, Microsoft offered voluntary buyouts to about 7 per cent of its U.S. workforce, which is about 9,000 employees. Amazon and Meta platforms have also laid off thousands of employees this year.

It has also been reported that Xbox, the gaming division of the firm, will need a restructuring as its profit margin has slumped 3 per cent. Reuters reported that a surge in memory chip prices driven by data center demand has forced the software firm to raise Xbox console prices at a time when demand for the console was already soft.

"Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform and hardware subsidy, but our annual revenue has declined nearly half a billion during that time," Asha Sharma, the gaming division's head, said in a memo to employees.

TAGS