Microsoft's Latest Round of Layoffs Hits Xbox Division as 'Reset' Continues
Microsoft initiated layoffs across sales and Xbox divisions.
Aditya Raj
June 29, 2026 · 1 min read
Microsoft conducted a new round of layoffs affecting the Xbox division and sales teams as part of its 'reset' strategy. An estimated 650 employees were impacted, bringing total reductions to over 7,000 in 18 months, even as the company reaffirms commitment to key gaming studios.
Microsoft has initiated another round of layoffs affecting the Xbox division and sales teams, as the company's ongoing 'reset' campaign continues to reshape its workforce.
The affected roles span Xbox first-party studios, global sales, and marketing departments. While Microsoft declined to specify the exact number of positions eliminated, internal sources estimate approximately 650 employees were impacted in this round.
“This is part of a broader realignment across the company, but Xbox has been hit particularly hard this time.”
— Anonymous Microsoft employee on Reddit
Warning
This is the fourth round of Microsoft layoffs in the last 18 months, bringing the total workforce reduction since January 2025 to over 7,000 positions.
Microsoft's 'reset' strategy, announced last year, focuses on streamlining operations and redirecting investment toward AI and strategic gaming IP. Despite the layoffs, the company has reaffirmed its commitment to Activision, Bethesda, and Obsidian projects.
The layoffs come weeks after Microsoft canceled the Avowed sequel at Obsidian — part of the same realignment.
Key Takeaways
- 1 Microsoft laid off approximately 650 employees in Xbox and sales teams
- 2 This is the fourth round of layoffs in 18 months, with over 7,000 total reductions
- 3 The 'reset' strategy focuses on streamlining and redirecting investment to AI
- 4 Microsoft still committed to Activision, Bethesda, and Obsidian projects
Frequently Asked Questions
How many Microsoft employees were laid off in this round?
Approximately 650 employees were impacted, across the Xbox division and sales teams.
Is Microsoft cutting its gaming division?
No, Microsoft reaffirms commitment to its gaming studios, but is realigning resources as part of its broader 'reset' strategy.
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