Microsoft is reportedly preparing to cut more jobs, this time focusing on its Xbox division as part of a broader internal overhaul set to conclude before the company’s financial year wraps up on June 30. If confirmed, this will mark the fourth significant round of layoffs at the tech giant in less than two years.

According to a Bloomberg report citing sources familiar with the matter, multiple teams within Xbox could be affected, though the total number of job losses has not yet been disclosed. The layoffs are believed to be part of a larger strategic restructuring that may also impact Microsoft’s global sales workforce.

This round of job cuts follows previous shakeups in the Xbox department, which oversees Microsoft’s gaming consoles, first-party studios, and services like Xbox Game Pass. In 2023, the company shut down several gaming subsidiaries and made sweeping changes in its gaming business—moves that have only intensified since the $69 billion acquisition of Activision Blizzard was finalized.

Industry observers say this reorganisation is designed to streamline operations and increase profitability, especially as Microsoft continues to double down on high-cost investments in artificial intelligence and cloud computing. The company has been channeling massive resources into expanding its AI capabilities and data center infrastructure, leading to tighter spending elsewhere.

The upcoming changes are not limited to Xbox. Earlier this month, reports suggested that Microsoft is planning widespread layoffs across various business units. A prior wave of cuts in May reportedly eliminated around 6,000 roles, primarily in engineering and product teams. This time, customer-focused departments such as sales and marketing—which were mostly untouched previously—may also face reductions.

To rein in expenses, Microsoft has been outsourcing certain operations. In April, the company began shifting sales responsibilities for small and medium business clients to third-party vendors, part of a broader move to optimise internal resources and focus more heavily on emerging tech areas.

As of June 2024, Microsoft employed roughly 228,000 people globally, with about 45,000 working in sales and marketing. Given the scope of the anticipated job cuts, this next round may become one of the company’s most significant internal reshuffles in recent years.

While Microsoft has not made any official announcement regarding the layoffs, it has stated in the past that periodic workforce reviews are part of its strategy to align operations with long-term objectives. Recent communications from the company have underscored a sharpened focus on operational efficiency and prudent financial management.