Microsoft announced on Monday it will lay off 4,800 employees, amounting to 2.1% of its global workforce, with cuts especially pronounced in its Xbox department. Amy Coleman, executive vice president and chief people officer, attributed the layoffs in part to a shakeup in the tech sector wrought by artificial intelligence, stating "AI is changing how work gets done," though noting none of the terminated roles will be replaced by AI. Xbox will slash 1,600 jobs as part of the layoffs announced on Monday, plus an additional 1,600 cuts through the end of fiscal year 2027, according to Xbox CEO Asha Sharma, who said "Our business today is not healthy" due to weaker-than-expected performance for Game Pass and stiff competition. Xbox will not cancel any first-party, publicly announced games or projects. Shares of Microsoft fell about 1% in early trading on Monday.