Microsoft is reportedly preparing for another round of job cuts, with the Xbox division expected to bear the brunt of this restructuring. This move, anticipated to be announced early next week, marks what is set to be the fourth major layoff at the company in the past 18 months. The layoffs are part of a broader effort to reorganize Microsoft as the company approaches the end of its fiscal year on June 30, 2025.

According to sources familiar with the matter, the cuts are likely to affect multiple teams within the Xbox division, which is responsible for the company's gaming consoles, game development studios, and digital services such as Game Pass. Although the exact number of job losses is still unclear, the decision follows significant changes within the division in 2023, including the closure of certain gaming subsidiaries and staffing cuts.

This latest round of job cuts comes at a time when Microsoft is focusing on improving profitability, especially after the $69 billion acquisition of Activision Blizzard in 2023. As the company pivots toward emerging technologies like artificial intelligence and cloud infrastructure, Microsoft is looking to optimize spending by reducing operational costs in other areas, including gaming and sales operations.

The restructuring is not limited to the gaming sector. Reports suggest that this round of layoffs could extend to Microsoft's global sales teams, a sector that was previously shielded from the May 2025 layoffs, which saw around 6,000 employees let go, mostly from engineering and product teams. Sales and marketing roles, which accounted for a significant portion of the workforce, could be targeted this time.

With billions of dollars invested in AI-powered services and cloud data centers, Microsoft is channeling resources into high-cost areas while attempting to streamline other operations. The company has already outsourced certain functions, including small and medium-sized business software sales, to third-party firms in a bid to reduce costs.

While Microsoft has not officially confirmed the upcoming layoffs, the company regularly reviews its workforce structure to align with long-term goals, focusing on efficiency and controlling non-essential spending. As Microsoft navigates these internal changes, employees worldwide, including its 45,000 sales and marketing staff, may face uncertainty ahead.