Nadella Backs Xbox Comeback as Microsoft Cuts 4,800 Jobs

Yahoo Finance··US·Read original
3▲0 ▼1Impact / 5
Summary · why it matters

Microsoft CEO Satya Nadella said he feels "fantastic" about Xbox's gaming IP and expects a resurgence in the coming fiscal year under Xbox CEO Asha Sharma, even as the division undergoes major restructuring and layoffs. In July, Microsoft said it would eliminate approximately 4,800 positions, or 2.1% of its global workforce, as part of a broader restructuring focused primarily on its Commercial and Xbox organizations. Within Xbox, Sharma said the company planned to reduce its workforce by approximately 3,200 employees during fiscal 2027, including about 1,600 immediate job cuts, and last week Microsoft announced it is eliminating 268 roles across Halo Studios, other first-party studios, and Xbox Game Studios' management and central functions. Sharma said the restructuring was necessary as Xbox faced weaker hardware demand, higher component costs and pressure on business margins, adding that "our business today is not healthy," and the reset also includes transferring four gaming studios to new management and reducing staffing across units including Activision, Blizzard and Mojang. In April, Microsoft lowered Game Pass Ultimate to $22.99 from $29.99 and PC Game Pass to $13.99 while removing day-one access to new "Call of Duty" titles, but in June it raised Xbox console prices, citing surging memory and storage costs driven by the AI boom, with component prices up more than 2.5 times and potentially doubling again by fall 2027.

Impact on assets 1

Artificial Intelligence▼ · 1 stocks
Microsoft Corporation
MSFT
▼ NegativeCapitalPricingrelevance

Microsoft is cutting ~4,800 jobs (2.1% of workforce) in a restructuring focused on Commercial and Xbox, with Xbox facing weak hardware demand and margin pressure.

Off-coverage companies 3

Halo StudiosPrivate▼ Negative
Capitalrelevance

Microsoft is eliminating 268 roles across Halo Studios and other first-party studios as part of the Xbox restructuring.

Blizzard EntertainmentPrivate▼ Negative
Capitalrelevance

The Xbox reset includes reducing staffing across units including Activision, Blizzard and Mojang.

Mojang StudiosPrivate▼ Negative
Capitalrelevance

The Xbox reset includes reducing staffing across units including Activision, Blizzard and Mojang.

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