22:28 - 6.07.2026

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July 6, Fineko/abc.az. Tech giant Microsoft is optimizing costs to fuel its heavy investments in artificial intelligence (AI), launching a new wave of layoffs that will impact 6,400 employees (roughly 3% of its total workforce).

Structural Reforms and Key Drivers:

• A "Great Reset" at Xbox: 3,200 of the layoffs will hit the gaming division (Xbox). The remaining 3,200 cuts will primarily target sales and product development departments.

• Low Profit Margins: In a memo to staff, Xbox CEO Asha Sharma admitted that business is currently not in a healthy state, noting that profit margins are three to ten times lower compared to similar enterprises.

• Studio Adjustments: As part of the restructuring, several Xbox gaming studios are expected to be spun out into independent operations or divested from internal management.

Financial Pressure: Microsoft's massive capital expenditures on data centers to sustain its AI leadership are forcing aggressive belt-tightening measures across its traditional business units. This follows a two-tier downsizing cycle last year that eliminated roughly 15,000 roles.