Xbox continues its reset with major restructuring

Microsoft began another wave of layoffs on Tuesday, cutting roughly 500 positions, mostly from its Xbox gaming division, where it is cutting 268 jobs.

It’s also handing off development of the next Halo game to Activision, maker of Call of Duty, which Microsoft acquired for $69 billion in 2023.

The job cuts follow a major downsizing in July, when Microsoft announced plans to trim 2.1% of its global workforce (around 4,800 employees). It has offered US staff up to 39 weeks of base pay as severance.

The latest cuts reflect Xbox’s ongoing strategy to eliminate roughly 20% of its workforce by the end of the fiscal year and divest from some game studios.

Xbox reported a 5% year-over-year revenue decline in the first quarter, and its profit margin fell to 3% in the June quarter.