Microsoft is laying off nearly 5,000 employees across commercial Xbox sales

Microsoft cut about 4,800 jobs, or 2.1% of its global workforce, on Monday — the latest in a series of changes. Series of layoffs this Raising concerns That artificial intelligence will replace people in companies.

The layoffs will impact Xbox and business sales more, according to A note Shared with Microsoft employees.

Below is an excerpt from the memo attributed to Amy Coleman, Executive Vice President and Chief People Officer:

“Our business is changing because the world around it is changing. The way technology is built, deployed, and used is transforming faster than ever in my time here. The needs of our customers are changing, and the business models that serve them are changing, and that means that the business itself — what we do, where we focus, and how we organize — must transform, too.”

Companies do not get to choose whether or not their industry changes; They just have to choose whether to change with him. This means we will need to adjust resources and roles and change the way we work so that we can have the greatest impact for our clients.

Coleman stressed that the roles being eliminated today “are not being replaced by artificial intelligence,” but noted that “what is true is that artificial intelligence is changing how work gets done.”

“Some of the tasks we do every day can now be automated, and that means we all need to keep learning, keep building new skills, and keep adapting as work evolves,” Coleman wrote.

For many who feel the sting of unemployment, this is a distinction without a difference.

The layoffs build on Microsoft’s recent launch of its software Border Company business unitwhich focuses on delivering enterprise AI deployments using the company’s existing AI tools and an army of engineers deployed at the front. The move is backed by a $2.5 billion investment, reflecting a common theme seen among layoffs this year, which is that job cuts are linked to increased spending on AI.

Speaking about the layoffs at Xbox, Coleman had a bit to say: “We are restructuring to position the business for long-term success. Engineering teams across the company will also be evolving their structure and priorities to meet customer needs and innovate for the future.”

As part of this transition, Microsoft will transition four of its game studios to operate under new management, ensuring that intellectual property and ongoing projects are preserved, Coleman wrote.

The Xbox layoffs come as the gaming industry shrinks amid new opportunities for artificial intelligence. Companies building global models — such as Google DeepMind, World Labs, General Intuition, Luma AI, and Runway — have received millions of dollars in funding over the past year and have gotten a lot of hype for their demos of operable global models. All of these companies see gaming as a near-term marketing opportunity.

In April, Microsoft offered acquisitions Structured as a voluntary dismissal of an unknown number of employees – Some estimates The number was estimated at about 5,500, with the aim of building high-performance teams. Last year, Microsoft laid off about 15,000 employees in two rounds.

The cuts are part of a series of layoffs in the tech industry that has seen nearly 154,000 people lose their jobs in the first half of 2026 alone, with major tech companies such as Meta, Oracle, Amazon and Cognizant cutting thousands of workers.

Microsoft said that alongside the cuts made Monday, it is working on ways to retain employees by reskilling workers or assigning people to new roles.

“Over the past year, we have redeployed more than 4,000 employees into new roles, including 500 more this month,” Coleman said.

Microsoft did not immediately return a request for comment and further information.