Microsoft To Cut 9,000 Jobs; To Cancel Major Xbox Projects In Sweeping Restructuring

Microsoft

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(RTTNews) - Microsoft has announced plans to lay off around 9,000 employees — representing less than 4% of its global workforce — as part of a sweeping reorganization aimed at streamlining its structure and boosting efficiency.

The layoffs, revealed on the second day of the company's 2026 fiscal year, will impact teams across multiple business units and regions, a source told CNBC.

"Organizational changes are necessary to position the company and its teams for success in a dynamic marketplace," a Microsoft spokesperson said in a statement.

The tech giant has conducted several rounds of layoffs this year, cutting less than 1% of staff in January, more than 6,000 in May, and at least 300 in June. Its workforce stood at 228,000 as of June.

In the Xbox division, significant cuts include the closure of The Initiative studio and the cancellation of high-profile titles such as Perfect Dark and Everwild.

Matt Booty, president of game content and studios, acknowledged the tough decisions in an internal memo, citing the need to reprioritize resources in a rapidly evolving gaming industry. Turn 10 Studios, developer of Forza Motorsport, was also affected.

Despite the cuts, Microsoft continues to report strong financials, posting $26 billion in net income on $70 billion in revenue for the March quarter. Executives expect 14% year-over-year revenue growth in the June quarter, driven by Azure cloud services and productivity software.

Microsoft shares recently hit a record high, but the company, like many tech peers, is trimming layers of management and shifting resources toward its most strategic growth areas as economic and competitive pressures mount.