Microsoft's Chief People Officer: 4,800 Job Cuts Aren't About AI

Microsoft has revealed plans to cut nearly 4,800 jobs, around 2.1% of its worldwide staff  as part of a wider restructuring effort to bring its workforce and spending in line with shifting business priorities.

A significant portion of these cuts will hit the Xbox gaming division, which will lose 3,200 positions, with 1,600 employees being let go right away.

This restructuring follows years of substantial investment in Xbox, including Microsoft's purchase of Activision Blizzard. Yet despite pouring billions into building up its gaming business, Microsoft has been unable to close the gap with rivals Sony's PlayStation and Nintendo.

The company has also been reshaping its gaming strategy, moving away from relying mainly on console-exclusive titles and instead releasing more of its games across multiple platforms.

While there have been reports that the layoffs have been triggered by the increasing advent of AI, the Chief People Officer, Amy Coleman has refuted the same.

As per Reuters she said that AI was changing how work gets done by automating ⁠some routine tasks, adding that the layoffs were part of a broader effort to realign resources.

“I also want to be direct that the roles eliminated today are not being replaced by AI. At the same time, what  is  true is that ​AI is changing how work gets done,” Coleman added.

Coleman said the job cuts reflect a wider push to bring Microsoft's workforce, investments, and resources into alignment with its long-term business goals.

She also added that Microsoft will continue investing in employee reskilling while supporting those impacted by the layoffs.

“We are working on alternative solutions to job eliminations, and beyond this, we will continue to invest in equipping employees with new skills, including in AI. For those who are impacted, we provide financial support and resources to help them take their next step" she stated.

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