New Delhi, July 7 -- REDMOND - By Monday afternoon, 1,600 Xbox employees had received the email they had been dreading since Asha Sharma took over as chief executive of the division eight months ago. The message was frank in a way that corporate restructuring announcements rarely are. "Our business today is not healthy," Sharma wrote in a memo posted to Xbox Wire.

Microsoft announced on Monday that it would cut 4,800 jobs globally, about 2.1 percent of its roughly 228,000-person workforce, in what CNBC reported is the company's largest single-day reduction in recent years. The majority of those cuts fall outside gaming, concentrated in Microsoft's sales and consulting divisions. But the most consequential announcement is inside Xbox, whe...