Microsoft (MSFT) on Monday announced it is cutting 4,800 roles across the company, roughly 2.1% of its workforce.
The bulk of the layoffs, 3,200, will come from Microsoft’s Xbox division
According to Xbox CEO Asha Sharma, the first round of cuts includes 1,600 employees today. The company is also moving four studios—Ninja Theory, Undead Labs, Compulsion Games, and Double Fine Productions—to outside management, and is working to sell or spin off a fifth, Arkane Studios, in France. Microsoft stock fell more than 1% on the news.
Sharma, who took the reins of Microsoft’s gaming division in February, has made several statements over the last few months about working to address Xbox’s shortcomings. She’s taken steps to reduce the price of the company’s subscription gaming service, as well as improve branding. But Monday’s move is her most consequential yet. “Our business today is not healthy,” she wrote in an email to employees. “We are operating at margins that are 3-10x lower than comparable platform and publishing businesses.