Microsoft Prepares for Another Round of Layoffs

Microsoft is reportedly preparing for another round of layoffs as part of its cost cutting strategy. According to Business Insider, the company is expected to announce fresh job cuts soon, with the Xbox gaming, sales, and consulting divisions likely to be the most affected. Reports suggest the latest layoffs will impact less than 2.5% of Microsoft's global workforce of 2,20,000 employees.

The company had already laid off 6,000 employees in May 2025 and another 9,000 employees, representing 4% of its workforce, in July 2025. Microsoft is expected to make an official announcement after the start of its new financial year on July 1. Some affected employees may also be reassigned to new internal roles.

Microsoft has significantly increased investments in Artificial Intelligence (AI), leading to higher operational costs and restructuring across business units. The company’s stock has declined by around 17% over the past month amid concerns over AI spending and slowing demand for traditional software services. Earlier this year, Microsoft introduced a voluntary retirement program, with nearly 9,000 employees eligible and about one third opting for the scheme. However, sales and consulting employees were excluded, making these divisions more vulnerable to layoffs.