Microsoft to lay off 4,800 workers, overhaul Xbox unit

Microsoft announced on Monday, July 6, that it will cut as many as 4,800 jobs, or ​about 2.1 per cent of its global workforce.

The company has decided to overhaul its Xbox gaming business and furter divest up to five studios as it looks foward to ‌boost returns after heavy investment in the division over the years, Reuters reported.

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Microsoft’s restructuring of its gaming division will witness about 3,200 job cuts, which includes laying off 1,600 employees on Monday.

This comes after the company spent tens of billions of dollars to expand Xbox. This includes the acquisition of Activision Blizzard.

Reuters highlighted that the company has struggled to narrow the gap with Sony’s PlayStation and Nintendo, adding that this has prompted a broader rethink of ​the gaming business.

In recent times, Microsoft has shifted its strategy toward distributing its games across more platforms and not just rely on console-exclusive titles in a bid to ​to drive forward Xbox hardware sales.

In a note to employees, Xbox’s new head, Asha Sharma, said that the Xbox restructuring will involve disvestment of four studios.

Sharma highlighted that the ‘South of Midnight’ producer Compulsion Games along with ‘Psychonauts’ maker Double Fine Productions will become independent studios, and on the other hand Ninja Theory and Undead Labs will ​be spun off to grow ‘Senua’ and ‘State of Decay 3’.