Microsoft Corp. today launched a round of job cuts that is expected to affect 9,000 employees, or about 4% of its workforce.
CNBC reported that the layoffs impact staffers across multiple units, experience levels and locations. Those locations include Microsoft’s home state of Washington. According to a regulatory filing, the company is laying off 830 employees at its Redmond headquarters.
The filing also revealed that some of the affected staffers work at Microsoft’s sales division. The company’s video game business will be impacted as well.
“To position Gaming for enduring success and allow us to focus on strategic growth areas, 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,” Microsoft executive Phil Spencer wrote in an internal memo obtained by CNBC.
The job cuts are not unexpected. Reports that Microsoft is looking to shrink its video game division first emerged last month. According to The Verge, some of the layoffs stem from changes that the company is making to the way it distributes Xbox consoles in Europe.
The reorganization comes ahead of a major upgrade to the consumer device series. Microsoft plans to launch a new Xbox powered by a custom chip from Advanced Micro Devices Inc., which also developed the silicon in the current-generation consoles. Additionally, the tech giant will enable third-party manufacturers to make Xbox-branded devices.
In addition to selling consumer hardware, Microsoft’s gaming division operates several video game studios. The Associated Press reported that some of those studios are also impacted by the layoffs.
The job cuts come two months after Microsoft reported better-than-expected financial results for its fiscal third quarter. In the three months ended March 31, the company generated a $25.8 billion profit on sales of $70 billion. Microsoft’s revenue forecast for the current quarter likewise topped the consensus estimate.
The workforce reduction is at least the fourth that the company has launched since the start of the year. In January, Microsoft laid off under 1% of its workforce following a series of performance evaluations. It cut 6,000 more jobs in May and 300 last month.
Other tech giants are also restructuring their workforces in a bid to boost operational efficiency.
Last month, Amazon.com Inc. Chief Executive Officer Andy Jassy stated that he expects the company’s headcount to shrink in the coming years. He cited internal artificial intelligence initiatives as the reason. Google LLC, in turn, has reportedly offered buyouts to employees in several business units.
Photo: Microsoft
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