'It Never Trickles Down' — Bernie Sanders Hits Out at Microsoft Over Xbox Layoffs and Console Price Rises, Says They Prove Corporate Tax Breaks Do Not Create Jobs

Sen. Bernie Sanders has deed retired astatine Microsoft implicit the caller layoffs astatine Xbox arsenic good arsenic console terms rises, insisting they’re grounds that firm taxation breaks bash not make jobs.

Pointing to the billions of dollars of nett Microsoft makes alongside the billions successful taxation breaks it has received and the tens of millions it pays CEO Satya Nadella, the 84-year-old legislator from Vermont claimed that the layoffs were impervious that firm taxation breaks bash not pb to occupation creation.

“Last year, Microsoft made $101 cardinal successful profits, got a $12.5 cardinal taxation interruption from Trump & paid its CEO $96 million,” Sanders tweeted. “This year, it’s raising the terms of an Xbox by $150 & eliminating 3,200 jobs. Please don’t archer maine firm taxation breaks make jobs. It ne'er trickles down.”

This week, Microsoft announced 3,200 unit astatine Xbox are acceptable to suffer their jobs this fiscal year, with 1,600 going present and the remainder to travel — leaving thousands of employees with an anxious hold that could resistance retired for months. As portion of the cuts, Microsoft has jettisoned 4 studios which were brought successful to bolster Game Pass with caller games nether the Phil Spencer era, with different workplace successful negotiations to beryllium sold oregon unopen down.

The quality followed the announcement of a important terms hike for Xbox consoles, which Microsoft blamed connected the ongoing “components crisis.” The terms rises, which commencement from August 1, volition spot the Xbox Series summation by $100 for 512GB models and $150 for 1TB models. The 2TB exemplary volition beryllium discontinued.

In its 2025 fiscal twelvemonth (ending June 30, 2025), Microsoft reported a grounds nett income of $101.8 cardinal (a 16% summation year-over-year). This monolithic nett was generated connected $281.7 cardinal successful full revenue, driven by wide maturation crossed Microsoft’s cloud, AI, and productivity segments.

Sharma has said the Xbox business, however, is struggling. Xbox ended the fiscal twelvemonth with a 3% accountability borderline (assumed to beryllium nett margin), down year-over-year. Excluding Activision Blizzard King, implicit the past 5 years, Microsoft spent implicit $20 cardinal connected ongoing investments successful what Sharma called its content, platform, and hardware “subsidy,” but yearly gross has declined astir fractional a cardinal during that time.

“We are operating astatine margins that are 3-10x little than comparable level and publishing businesses,” Sharma said successful a blog station announcing the layoffs. “We entered Gen 9 with a smaller instal basal and a higher outgo structure. To grow, we stake connected Game Pass, multi-platform, and a broader portfolio of content. While those businesses person created meaningful value, they did not turn astatine the gait we expected. As that happened, our halfway concern weakened, and we added much teams, much investment, and much time, hoping for a amended outcome. And present the manufacture is facing the astir terrible hardware situation successful its history. We indispensable reset Xbox.”

Of course, Sanders’ connection is little astir Xbox specifically, and much astir Microsoft and his views connected firm America. But it’s worthy noting that this week’s layoffs astatine Xbox were a portion of broader cuts crossed Microsoft. The institution really announced plans to chopped 4,800 jobs — astir 2.1% of its workforce — though intelligibly Xbox is bearing the brunt of the restructure.

This isn’t the archetypal clip Sanders has spoken retired astir the goings connected successful the video crippled industry. In 2022, Sanders and 3 different U.S. senators raised concerns astir Microsoft’s past projected acquisition of Activision Blizzard. “We are profoundly acrophobic astir consolidation successful the tech manufacture and its interaction connected workers," Elizabeth Warren, Bernie Sanders, Cory Booker, and Sheldon Whitehouse wrote.

Microsoft yet won retired successful its conflict with the FTC implicit the $69 cardinal acquisition of Activision Blizzard. That tremendous buyout was meant to assistance Xbox turn its gaming concern significantly. This week, Sharma admitted it had been a failure.

Responding to the layoffs, the Communications Workers of America (CWA) said they would combat for the rights of affected Xbox staff.

“When Microsoft sought to turn its video crippled division, firm executives made an statement with video crippled workers and their union, CWA, to respect their close to signifier for a caller time for workers crossed Microsoft’s video crippled studios,” Claude Cummings Jr., President of CWA, said. “Although our national signed neutrality agreements with Microsoft, we person been highly disappointed by a institution that has slow-walked our members astatine the bargaining table, making CWA members hold for the protections of a national contract.

"But marque nary mistake — whether our members person a declaration successful hand, oregon are inactive astatine the bargaining table, CWA members astatine Xbox person the powerfulness and extortion of national membership. When Microsoft decides to dainty the workers who built Xbox arsenic expendable, it should cognize who they’re dealing with. This is not conscionable a combat with the thousands of workers crossed Xbox; it’s a combat with each and each subordinate astatine CWA — hundreds of thousands of radical strong.”

Tom Williams/CQ-Roll Call, Inc via Getty Images.

Wesley is Director, News astatine IGN. Find him connected Twitter astatine @wyp100. You tin scope Wesley astatine [email protected] oregon confidentially astatine [email protected].