Microsoft will reportedly cut several hundred Xbox roles next week, mainly in support areas, as part of a broader restructuring tied to its Activision Blizzard acquisition and ongoing cost-cutting efforts.

Microsoft Corp. (MSFT) is reportedly planning another round of layoffs within its Xbox division next week as part of a broader company restructuring.

According to inside sources cited by a Bloomberg report, Microsoft managers expect deep cuts throughout the Xbox organization. 

Microsoft is preparing to cut several hundred positions within its gaming arm, primarily targeting administrative and support roles while leaving core game development largely unaffected, said the report.

Despite the news, Microsoft stock inched 0.3% higher in Tuesday morning trading.

The reductions are scheduled for next week, coinciding with the final days of Microsoft’s fiscal year, which ends June 30.

This marks the fourth sizeable layoff at Xbox in just 18 months, and the shutdown of several studios amid cost-cutting efforts.

The move comes amid growing demands to restructure the team and simplify Xbox’s overall operations after absorbing the $69 billion purchase of Activision Blizzard Inc.

Microsoft’s actions mirror broader trends in gaming, where rising development costs and weaker consumer demand have led to layoffs and studio closures.

Last week, Microsoft formed a multi-year alliance with Advanced Micro Devices, Inc.(AMD) to co-create custom chips, aiming to power future Xbox consoles with advanced AI-driven graphics and enhanced gameplay.

In May, the tech giant had announced plans to reduce its global headcount by approximately 3%, impacting thousands, as part of broad organizational changes aimed at adapting to shifting market conditions.

Microsoft’s third quarter (Q3) revenue rose 13% year-on-year (YoY) to $70.1 billion, surpassing the consensus estimate of $68.44 billion, as per Finchat data.  Diluted earnings per share (EPS) came in at $3.46, topping the estimate of $3.22.

On Stocktwits, retail sentiment around Microsoft improved to ‘bullish’ territory from ‘neutral’ the previous day, amid ‘high’ message volume.

MSFT's Sentiment Meter and Message Volume as of 10.40 a.m. ET on Jun.24, 2025 | Source: Stocktwits

Microsoft stock has gained over 15% in 2025 and over 8% in the last 12 months.

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