Microsoft to cut more jobs in Xbox division, even though profits have been up in recent months

Microsoft is reportedly gearing up for another round of major job cuts across its Xbox division. This move comes as part of a wider company-wide restructuring spree that’s been going on for the past 18 months.

With mounting pressure to boost profits post-Activision Blizzard’s $69 billion acquisition, the Xbox team seems to be next on the chopping block.

A Fourth Wave of Cuts Hits Xbox

Sources close to the matter say Microsoft is preparing substantial job cuts in its Xbox division, possibly as early as next week. These layoffs aren’t just limited to one team or region. Managers across Xbox are reportedly bracing for wide-scale reductions. And if you’ve been following Microsoft’s moves lately, this won’t come as a total shock.This will be the fourth major layoff round for Xbox since early 2023. Not to forget, several Xbox game studios were already shut down in 2024. It’s starting to feel like a pattern, and not the good kind.

Pressure Mounts Post-Activision Deal

After Microsoft dropped a jaw-dropping $69 billion on Activision Blizzard in 2023, expectations shot through the roof. That deal, the biggest in Microsoft’s history, was meant to transform Xbox into a global gaming powerhouse.

But now, the pressure to deliver profits has reached a whole new level.From hardware to game studios, everything is being evaluated. The company wants leaner operations, fatter margins, and a smoother ride heading into the close of its fiscal year on June 30.

Layoffs Across Microsoft Continue

These upcoming cuts are part of a broader Microsoft layoff spree.

This isn’t random. It’s Microsoft’s attempt to correct the over-hiring that happened during the pandemic boom.

As demand slowed and macroeconomic conditions shifted, reality hit hard.

Satya Nadella Frames It as “Repositioning”

During an earlier internal town hall, Microsoft CEO Satya Nadella addressed concerns about the ongoing layoffs, calling them a “repositioning” rather than a performance issue. “This was not about people failing. It was about repositioning for what comes next,” Nadella reportedly said.However, the mounting cuts, particularly within a high-profile division like Xbox, signal more than just repositioning.

They hint at a deeper restructuring of Microsoft’s gaming ambitions.

What Does This Mean for Xbox’s Future?

At the time of writing, Microsoft hasn’t dropped an official statement about the upcoming Xbox cuts. But if Bloomberg’s report is accurate, and it usually is, we could hear something very soon.What’s certain is this: Xbox is entering a new phase. Between Activision integration, financial scrutiny, and constant restructuring, the gaming division is being tested like never before.