In a significant restructuring move, Microsoft has announced the layoff of 4,800 employees globally, with a large portion of the cuts impacting its Xbox division. This includes a planned downsizing of its workforce, with Xbox set to cut approximately 3,200 jobs and divest five gaming studios including Compulsion, Double Fine, Ninja Theory, and Undead Labs. Despite these layoffs, Microsoft maintains that the changes do not represent a shift towards replacing jobs with AI technologies. Critics have noted the ailing health of the Xbox division, prompting calls for a reset. Management states the company is focused on improving its gaming business while ensuring investment in game development remains intact.