The tough times at Xbox are continuing, as Microsoft is cutting more Xbox staff. This comes at a time when Microsoft’s stock price is soaring and profits are up.

Variety confirmed that Microsoft is cutting less than 4% of its global workforce in this latest move, including staff at Xbox. Microsoft had around 228,000 people by the latest count, so the cuts would be around 9,000 people. “We continue to implement organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said.

According to Bloomberg, Microsoft’s Barcelona-based mobile game developer King is cutting 10% of its staff, which works out to around 200 people at the Candy Crush studio. Cuts at ZeniMax’s European offices are coming, too.

Microsoft Gaming CEO Phil Spencer sent a memo to staff today addressing the cuts, saying the job losses were necessary to allow for the “enduring success” of Xbox.

“We will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness,” he said.

Spencer also addressed the fact that the cutbacks are coming at a time when business is booming for Xbox. “I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger,” he said.

The success of Xbox today is the result of “tough decisions” Microsoft made previously, Spencer said.

“We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities,” he added. “We will protect what is thriving and concentrate effort on areas with the greatest potential, while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come.”

Xbox has been shedding staff on a semi-regular basis for the past few years. After Microsoft closed its deal to buy Activision Blizzard, it laid off around 1,900 people. An additional 650+ layoffs came later. In May 2024, Microsoft closed four studios that it acquired when it bought ZeniMax, including Arkane Austin, Tango Gameworks, Alpha Dog Games, and Roundhouse Games.

At least some of the layoffs and studio closures at Xbox are believed to be part of a wider cost-cutting program at Microsoft that has resulted in many thousands of layoffs over the past two years at the company.

Microsoft Gaming CEO Phil Spencer previously said the company needed to cut Xbox staff to be a sustainable business. Xbox president Sarah Bond gave an answer many were not pleased with as well regarding the job cuts.

Microsoft’s latest round of layoffs comes amid profitable times for the company. For Microsoft’s latest quarter, the company reported net revenue of $70.1 billion (up 13%) and a net profit of $25.8 billion (up 18%). The Xbox division specifically has posted year-over-year revenue growth. Microsoft’s stock price is up by nearly 150% in the past five years.

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