Microsoft has laid off 9,000 employees this week, bringing its total job cuts to more than 15,000 this year. The decision, confirmed by The Seattle Times, includes significant cuts in the Xbox division, though the company has not provided exact numbers by department.
In an internal email, Xbox CEO Phil Spencer said the layoffs are part of a broader effort to reshape the gaming business for long-term success. “To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business,” Spencer wrote.
The move comes at a time when Microsoft’s gaming division is reportedly performing well. Spencer’s email acknowledged that the company currently has more players, games, and gaming hours than ever before, and described the Xbox platform and hardware as stronger than ever. Yet, thousands of roles are being eliminated.
Spencer stressed that the layoffs are not related to employee performance. “These decisions are not a reflection of the talent, creativity, and dedication of the people involved,” he said.
Instead, the job cuts reflect Microsoft’s broader shift toward artificial intelligence. The company is investing heavily in AI and cloud technology, areas seen as crucial to its future. Analysts say that freeing up resources for these expensive technologies may be the real reason behind the cuts, despite the company’s healthy earnings.
Microsoft posted record profits earlier this year, but like many tech giants, it is reallocating spending toward AI development—an area that requires massive investments, including advanced hardware and specialized talent.
While Spencer’s message aimed to be supportive, critics say the language used downplays the real impact of the layoffs. Industry observers have called for more transparency, arguing that it would have been more respectful to clearly explain the company’s priorities.
Microsoft has not issued a public statement beyond internal communications.
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