Microsoft has announced a new round of layoffs affecting 4,800 employees across the company, with its Xbox gaming division facing the largest share of the reductions. The restructuring comes as the technology giant seeks to simplify operations and improve returns from years of investment in its gaming business. Around 3,200 jobs are expected to be eliminated across Xbox, affecting employees ranging from developers and support staff to senior executives.
Among those losing their jobs is Kevin LaChapelle, Vice President and General Manager for Xbox Cloud Gaming, who is leaving Microsoft after 37 years with the company. LaChapelle played a major role in developing the Xbox Backward Compatibility programme, one of the platform's most popular features. His departure has drawn particular attention because of his long tenure and senior position within Microsoft's gaming operations.
LaChapelle joined Microsoft in 1989 as a software design engineer and worked across several areas of the company during his nearly four-decade career. In a LinkedIn post, he confirmed that he had been laid off from Xbox and reflected on his work developing the Backward Compatibility programme. He recalled being present when the feature was announced at E3 in 2015 and described the audience's enthusiastic response as one of the memorable moments of his career.
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Microsoft is eliminating 1,600 Xbox positions immediately and plans to cut another 1,600 roles by July 2027, taking the total reduction in the gaming division to about 3,200 jobs. The restructuring is intended to simplify Xbox's operating structure after years of investment in services and initiatives including Game Pass, cloud gaming, content expansion and the release of games across multiple platforms.
The workforce reductions have also affected several Xbox studios and support teams. Bethesda Game Studios said developers, programmers, artists, designers and quality assurance testers were among those losing their jobs. Corporate Vice President of Product Services Dave McCarthy is also leaving after eight years with the company, highlighting the extent to which the restructuring has reached both production teams and senior leadership.
In an internal communication, Xbox chief executive Asha Sharma said the company had invested heavily in Game Pass, multi-platform publishing and expanding its content portfolio but acknowledged that these businesses had not grown as quickly as expected. The latest layoffs underline the pressure on Microsoft to improve the financial performance of its gaming operations while reorganising a business that has expanded significantly through investments, acquisitions and new distribution strategies.
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