Microsoft Cuts 2,850 Xbox Jobs, Its Largest Gaming Layoff

Microsoft is eliminating 1,600 Xbox positions by July 6, 2026, with another 1,250 roles to follow over the next year. The 2,850 cuts represent over 30 percent of a broader 4,800-job reduction across the company—2.1 percent of Microsoft's total workforce. The restructuring marks Xbox's biggest job loss on record and occurs under new CEO Asha Sharma, who took over from Phil Spencer in February 2026.