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(NewsNation) — Microsoft is eliminating up to 4,800 roles, according to reports.

Xbox is pressing the reset button, its new CEO said. For 1,600 employees, that means Monday is their last day at the company. Another 1,600 roles will be eliminated by the end of their 2027 fiscal year, a statement reads.

Xbox CEO Asha Sharma wrote the company has become too bloated and its investments were losing money. "History is full of companies that mistake longevity for inevitability. We will not be one of them," she wrote.

Microsoft is allowing four of the game studios it has acquired over the years — Compulsion Games, Double Fine Productions, Ninja Theory and Undead Labs — to spin off as their own companies or join other companies.

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The Verge is reporting Microsoft is eliminating an additional 1,600 roles in commercial sales and other roles. These layoffs come a year after Microsoft eliminated more than 9,000 positions across the company.

Microsoft's Xbox Series consoles have struggled to compete with Sony's PlayStation 5 and Nintendo's Switch systems. VGChartz numbers show the original Nintendo Switch has sold 154 million units since 2017, the PlayStation 5 has sold 92 million consoles since 2020, and the Xbox Series devices have sold 34 million units since 2020.

It's been a tough year for video game players and businesses. A global crunch on components have prompted Nintendo, Sony and Microsoft to raise prices on game systems that have been available for years.

Last week, Sony announced it would soon stop producing discs for its PlayStation systems, which means players will only be able to buy games digitally, seemingly eliminating their ability to resell them or buy them for less than companies are willing to sell them. Critics said it limits consumer choice, but Sony said trends have long pointed to digital games as most consumers' preference.

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