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Microsoft is rethinking its gaming business, and one of its first steps is shedding staff.The tech giant laid off 4,800 employees on Monday, accounting for roughly 2.1% of its global workforce. The cuts, which BI's Ashley Stewart first reported last week, mostly impact Microsoft's sales and Xbox business.Xbox accounted for 1,600 cuts on Monday, with the gaming division aiming to ultimately shed 3,200 jobs during the current fiscal year, which ends in June. That's 20% of Xbox's workforce.New Xbox CEO Asha Sharma didn't hold back when explaining why it's taking such drastic measures."Our business today is not healthy," Sharma wrote in the email to staff. "We are operating at margins that are 3—10x lower than comparable platform and publishing businesses."Sharma, who was named CEO earlier this year, highlighted the challenges with Xbox's aggressive expansion of its studio portfolio. She said in a typical year it loses 64 cents for every dollar it invests.Changes include a newly formed COO role focused on P&L, along with an organizational flattening that'll ideally have no more than three layers of management. Sharma said teams will have makers, player-coaches and directly responsible individuals, who own key decisions.
