Microsoft is planning layoffs that could affect over 9,000 employees, about four percent of its global workforce of 228,000. These layoffs are impacting various gaming studios and projects. The company is shifting its strategy towards artificial intelligence and reducing focus on hardware sales within the Xbox division. Concerns have been raised about the profitability of Xbox and PC Game Pass, with claims that Game Pass may not be as financially successful as previously thought. Christopher Dring noted that the profitability calculations for Game Pass do not include first-party development costs, which could significantly alter the perception of its financial success. A Microsoft spokesperson stated that the layoffs are part of efforts to align with business demands and improve organizational efficiency.