Is Microsoft Planning Another Round of Layoffs? Thousands of Jobs May Be Cut Next Week
Microsoft is preparing to implement another round of layoffs that could eliminate thousands of jobs across multiple divisions, according to a report by Business Insider.
Microsoft is preparing to implement another round of layoffs that could eliminate thousands of jobs across multiple divisions, according to a report by Business Insider. The impending workforce reductions are expected to primarily target positions within the company’s sales, consulting, and Xbox gaming units as part of an ongoing effort to manage operational expenses.
The tech giant is projected to formally announce the job cuts next week. The timing aligns with Microsoft’s historical pattern of restructuring personnel at the beginning of its fiscal year, which commences on July 1. While the exact scale of the reductions remains unconfirmed, initial estimates suggest the cuts will impact less than 2.5% of the company's total workforce of approximately 220,000 employees. Microsoft Layoffs: Tech Giant Reportedly Plans New Job Cuts Across Xbox, Sales and Consulting Divisions.
The move follows a series of larger workforce contractions over the past year. In 2025, Microsoft eliminated roughly 15,000 positions, which included 6,000 job cuts in May and an additional 9,000 in July—amounting to about 4% of its global staff at the time. Company sources indicate that some employees affected by the upcoming round may be offered alternative roles within the organization.
The structural changes come amid a broader push by Microsoft to control corporate expenses while aggressively ramping up investments in artificial intelligence (AI). This capital reallocation occurs as Wall Street raises concerns over how AI integration might disrupt traditional software service models. Reflecting market anxieties, Microsoft's stock has declined by approximately 17% over the past month.
Earlier this year, the company attempted to mitigate headcount through its first-ever voluntary retirement program. The initiative targeted U.S. employees whose combined age and years of service totaled 70 or more. Nearly one-third of the 9,000 eligible workers accepted the buyout package, which cost Microsoft an estimated $900 million in quarterly charges but helped soften the scope of involuntary layoffs. Commission-based sales staff were excluded from that program. Microsoft Prepares for Major Xbox Restructuring and Layoffs: Reports.
The upcoming cuts are also set to reshape the Xbox division under its new gaming CEO, Asha Sharma, who succeeded long-time chief Phil Spencer in February. Sharma recently issued an internal memo calling for a strategic "reset" of the gaming business to navigate shifting industry realities. Industry reports suggest the restructuring could result in closing or reorganizing at least one of Xbox’s wholly-owned development studios.
Microsoft has declined to comment on the pending layoffs.
(The above story first appeared on LatestLY on Jul 01, 2026 11:16 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
