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Xbox not ‘core’ part of Microsoft’s business, largest job cuts since 09 expected

Xbox not 'core' of Microsoft, job cuts expected at software giant
Xbox not 'core' of Microsoft, job cuts expected at software giant
Photo by Justin Sullivan/Getty Images

According to a report filed by Bloomberg, Microsoft, creator of the wildly successful Xbox 360 and Xbox One game consoles, is planning its largest job cuts in five years. In an attempt to “slim down” the technology giant, CEO Satya Nadella said in an interview that he is preparing “sweeping changes” at Microsoft.

These job cuts, rumored to top the personal best for Microsoft set in 2009 of 5800, are suspected to affect the assimilated Nokia unit, as well as “other divisions of Microsoft that overlap with that business”, the report states. Cuts also may affect engineering teams as well as testers within other divisions of Microsoft, as their roles become simplified or redefined with the new direction towards cloud-based technologies.

During a recent interview with Fortune, Nadella stated that Microsoft needed to focus on productivity as its core, and where does the Xbox division fit within that model?

““Xbox isn’t that far from [the core],” Nadella said. “We can do a few more things than the core. But the point is, you’ve got to have a culture to do it.”

“In other words,” Nadella continued, “you can’t treated the Xbox division like an operating systems group.”

Showing that Microsoft is indeed thinking of Xbox as a unique value proposition from the top down, Nadella continued to build value within the Xbox brand, and Microsoft’s vision for the future of that brand.

“I want us to be comfortable to be proud of Xbox, to give it the air cover of Microsoft,” Nadella said, “but at the same time not confuse it with our core.”

While this message may seem a strange effort to distance the Xbox division from the “core” of Microsoft, Nadella is no stranger to defending the Xbox brand. In an internal email posted to the company page, Nadella states “Xbox is one of the most-revered consumer brands, with a growing online community and service, and a raving fan base.”

Among rumors that Nadella would attempt to sell off the Xbox brand to another party, as well as Microsoft founder Bill Gates stating he would support the idea, these statements should put not only the consumer, but Xbox division team at a somewhat uneasy rest for the time being.

According to the latest available numbers, Microsoft holds over 127,000 employees currently, with a figurative cut of 6,000 jobs, the cut represents 4.7% if the current workforce.

Microsoft announces earnings, and likely any job cuts, on July 22, 2014.

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