Microsoft cuts 4,800 jobs and shrinks Xbox in 'significant restructure'

Microsoft is undertaking a significant restructuring, announcing the elimination of around 4,800 jobs, which constitutes approximately 2.1% of its total workforce. The layoffs will disproportionately affect the Xbox division, with more than 1,600 positions being cut immediately.

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These changes are about a bigger future for Xbox, not a smaller one.

Amy Coleman, executive vice president at Microsoft, communicated the decision to employees, emphasizing the need for the tech giant to refocus on customer-centric areas amidst a rapidly evolving industry. Asha Sharma, the newly appointed chief executive of Xbox, described the changes as the "most significant restructure in Xbox history." Sharma also revealed that four Xbox game development studios, Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs, will be spun off as independent entities.

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History is full of companies that mistake longevity for inevitability. We will not be one of them.

Sharma sought to reassure staff, stating that these changes are intended to foster a "bigger future for Xbox, not a smaller one." She cautioned against complacency, noting that "History is full of companies that mistake longevity for inevitability." Coleman echoed the sentiment of industry transformation, highlighting that companies must adapt to changing customer needs and technological shifts, including the growing influence of artificial intelligence on how work is performed.

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Companies don't get to choose whether their industry changes; they only get to choose whether they change with it.