Microsoft Announces 4,800 Job Cuts Globally Amidst Gaming Restructuring

California. American multinational technology company Microsoft has announced job cuts for 4,800 employees worldwide.

This is about 2.1 percent of the company's total workforce. The company has also decided to separate four studios as part of a major restructuring of its gaming business, Xbox. According to the company, 3,200 positions will be cut in the gaming division alone. Of these, 1,600 employees have already been laid off since Monday.

Microsoft had invested billions of dollars in expanding the Xbox business in recent years. In this process, it had also acquired Activision Blizzard. However, even after that, due to not achieving expected success in competition with Sony's PlayStation and Nintendo, the company is making major changes to its gaming business strategy.

Now Microsoft is adopting a strategy to make its games available on various platforms, not just on the Xbox console. This appears to be the company's plan to prioritize game distribution over console sales. Xbox chief Asha Sharma informed employees in a message that four studios will be separated as part of the restructuring.

According to her, Compulsion Games and Double Fine Productions will operate as independent studios. Similarly, Ninja Theory and Undead Labs will also be developed as separate companies, which will focus on the development of the games Senua and State of Decay 3 respectively. Also, Arkane Studios, which developed the game Dishonored, has stated that it has started discussions with its employees' union about the company's future. The studio is currently developing a new game based on Marvel Comics character Blade.

Recently, as the adoption of artificial intelligence has increased, technology companies have been laying off employees rapidly. It is estimated that major technology companies worldwide will invest more than $700 billion in AI this year. Amidst the pressure to generate returns from increasing investments, Amazon and Meta Platforms have also laid off thousands of employees this year. However, Microsoft's Chief Human Resources Officer Amy Coleman clarified in a message to employees that the positions being cut are not being eliminated to be replaced by AI.