Microsoft’s Xbox Division Faces Layoffs Despite Activision Revenue Boost

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2025-06-26 00:33:02

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Microsoft is preparing another round of layoffs in its Xbox gaming division, marking the fourth workforce reduction in 18 months. The cuts come despite a 43% year-over-year revenue surge driven by the $69 billion Activision Blizzard acquisition.

Beneath the surface growth, Xbox's core business shows weakness. Hardware revenue declined and Game Pass subscriptions missed targets. Without Activision's contribution, content and services revenue WOULD have dropped 4%.

The restructuring follows Microsoft's historical pattern of post-acquisition workforce adjustments. Broader industry challenges and the company's strategic shift toward AI investments are contributing factors. These cuts precede Microsoft's fiscal year-end, suggesting continued cost optimization.

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