Microsoft Cuts 4,800 Jobs as Xbox Shrinks

Microsoft (MSFT, Financials) is cutting 4,800 jobs as the company looks to lower costs and adjust to a faster-changing technology market.

MSFT GF Value: $561.35

Significantly Undervalued

Microsoft CorpView Full MSFT Analysis ?

The layoffs represent about 2.1% of Microsoft's workforce. The biggest hit is coming in the Xbox business, where about 20% of employees are expected to leave.

Xbox will cut 3,200 roles through fiscal 2027, including 1,600 jobs right away. Microsoft also plans to separate four gaming studios from the company, including Compulsion Games and Double Fine Productions.

The cuts follow a voluntary retirement program Microsoft offered earlier this year. More than one-third of eligible employees accepted it.

For investors, the message is clear. Microsoft is trying to protect margins while still spending heavily on artificial intelligence. The stock is down 19% this year, behind other large technology companies.

Microsoft said AI is changing how work gets done, but said the layoffs are not a case of AI directly replacing employees.

.