Microsoft is reportedly set to conduct another round of layoffs within its Xbox division next week as part of a broader company-wide reorganisation, according to Bloomberg.

Citing people familiar with the plans, the publication reported that managers within Xbox are bracing for substantial cuts across the entire group.

The company declined to comment on the matter, the report said.

This marks the fourth major layoff in the Xbox division over the past 18 months, following three significant reductions last year and the closure of several subsidiaries.

Xbox, responsible for video-game hardware and software, has faced increasing pressure from Microsoft executives to improve profit margins since the $69bn acquisition of Activision Blizzard, completed in 2023.

Bloomberg News previously reported that Microsoft plans to eliminate thousands of jobs, with a primary focus on its sales workforce.

The tech giant frequently undertakes major organisational changes near the end of its fiscal year, which concludes on 30 June.

The layoffs are part of Microsoft’s efforts to streamline operations while making substantial investments in AI infrastructure, including significant spending on servers and data centres to support AI development.

Earlier this month, Microsoft announced additional job cuts affecting over 300 employees, as reported by Bloomberg, as part of ongoing cost-management efforts.

Last month, Microsoft also announced plans to reduce approximately 3% of its global workforce, impacting around 6,000 employees across various levels, teams, and regions.