Microsoft cuts 4,800 jobs across Xbox and sales divisions as AI spending reshapes operations
13 Sources
[1]
Microsoft lays off nearly 5,000 employees across Xbox, commercial sales
Microsoft cut around 4,800 roles, or 2.1% of its global workforce, on Monday -- the latest in a series of layoffs that's stoking fears that AI will replace people at companies. The layoffs will hit Xbox and commercial sales the hardest, according to a memo shared with Microsoft's staff. Here's a
[2]
Microsoft is laying off 4,800 employees
A year after cutting around 9,100 employees, Microsoft is making further layoffs today as it begins its new financial year. The software maker is laying off around 4,800 employees today, approximately 2.1 percent of its workforce. Most of the employees affected by today's cuts are in Microsoft's
[3]
Microsoft cuts 4,800 jobs, about 2% globally, revamps salesforce and launches massive Xbox overhaul
Microsoft is cutting 4,800 jobs, just over 2% of its global workforce, citing a need to revamp its sales and consulting division to keep pace with a rapidly changing tech industry, while overhauling its Xbox business in a push for long-term growth and profitability from gaming. The cuts include
[4]
Microsoft set to cut thousands of jobs next week, spanning Xbox, sales and consulting
Microsoft is preparing to cut thousands of jobs next week, continuing to rein in operating costs as the company pours unprecedented sums into AI infrastructure. Business Insider broke the news Tuesday afternoon, saying that the cuts will impact less than 2.5% of the company's global workforce of
[5]
Microsoft cuts 4,800 jobs as it revamps Xbox in latest wave of mass layoffs
Thousands of gaming jobs will be shed over the coming fiscal year as Microsoft continues to invest heavily in AI Microsoft said Monday it was eliminating about 4,800 jobs - roughly 2% of its global workforce - in a cost-cutting move that will deliver a sweeping restructuring of its struggling Xbox
[6]
At Microsoft, thousands of layoffs and 'redeployments' as AI push continues
Microsoft is laying off about 600 Washington-based employees, part of companywide cuts, as it continues to cull its workforce amid a yearslong artificial-intelligence spending boom. The Redmond-based tech giant told employees Monday morning that it would cut roles across the Xbox gaming division
[7]
Microsoft Announces New AI Company Days Before Mass Layoffs
I was cruising my feeds today, minding my own business as I cooked in my sweltering 90-degree home office amid another global warming heat dome, when I was stopped dead in my digital tracks upon seeing what I can only describe as 17 words strung together into one of the worst sentences ever to
[8]
Microsoft is Cutting 4,800 Jobs: Is AI To Blame? Yes And No - Microsoft (NASDAQ:MSFT)
On Monday, Microsoft confirmed recent reports that the technology giant is cutting jobs. Microsoft's Chief People Officer Amy Coleman announced the elimination of 4,800 jobs, or around 2.1% of the company's global workforce. "When I stepped into this role, I promised to communicate more openly
[9]
Microsoft to Announce Fresh Layoffs Impacting Thousands as AI Investment Surge Reshapes Workforce: Report
Microsoft Reportedly Preparing Smaller Layoffs Than Last Year The layoffs are likely to affect less than 2.5% of Microsoft's roughly 220,000-person global workforce. The company could announce the reductions as early as next week, though the timing may change. Some employees whose roles are
[10]
Microsoft lays off nearly 5K workers, most of them at Xbox: 'Our business today is not healthy'
Microsoft is axing 4,800 employees, most of them from its Xbox division, as it and the rest of the tech industry seek to adapt to the AI era. The cuts come as the software giant has heavily invested in artificial intelligence after years of pouring cash into gaming. "Our business is changing
[11]
Microsoft's Next Layoffs Could Reshape Xbox Gaming Division as 5,700 Jobs on the Line
Microsoft is reportedly preparing another round of job cuts that could affect nearly 2.5% of its workforce. The move may once again impact Xbox as the company shifts more attention toward artificial intelligence. . Multiple reports indicate that the company is again planning to reduce around 2.5%
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Why is Microsoft stock sliding today? By Investing.com
Investing.com -- Microsoft stock fell 1.5% in morning trading after the company confirmed it is eliminating approximately 4,800 positions -- about 2.1% of its global workforce -- as part of a strategic restructuring tied to its recently unveiled "Frontier Company" AI initiative, with cuts
[13]
Microsoft to slash thousands of jobs as AI spending concerns fuel third major layoff round in a year: report
Microsoft is reportedly planning yet another round of layoffs that will slash thousands of roles next week in an effort to cut costs, as concerns about out-of-control AI spending mount. Less than 2.5% of the company's 220,000-person workforce - or fewer than 5,500 workers - will be axed from the
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Microsoft eliminated 4,800 roles, representing 2.1% of its global workforce, with the deepest cuts hitting Xbox and commercial sales. The layoffs come as the company invests over $100 billion in AI infrastructure, marking the latest wave of tech industry job cuts that have affected 154,000 workers in the first half of 2026 alone.
Microsoft Layoffs Hit 4,800 Employees Amid Massive AI Investment
Microsoft eliminated approximately 4,800 roles on Monday, representing 2.1% of its global workforce, as the company restructures its operations to align with what executives describe as the fastest technological transformation in the company's history
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. The Microsoft job cuts primarily affect the Xbox division and commercial sales teams, with Amy Coleman, executive vice president and chief people officer, attributing the reductions to fundamental shifts in how technology is built, deployed, and used2
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Source: Analytics Insight
The timing of these layoffs coincides with Microsoft's unprecedented AI investment, as the company is on pace to spend more than $100 billion building AI and cloud infrastructure in the fiscal year that just ended
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. This represents an increase from $88.7 billion the previous year, with about two-thirds dedicated to AI-enabling chips. The cuts come amid a 30% stock slide that has wiped out roughly $1.2 trillion in Microsoft's market value over the past nine months3
.Xbox Division Layoffs Signal Historic Gaming Restructuring
The Xbox restructuring represents the most significant overhaul in the gaming division's history, with approximately 1,600 positions eliminated immediately and plans to cut a total of 3,200 jobs—roughly 20% of the global Xbox workforce—by the end of the fiscal year
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. Xbox CEO Asha Sharma revealed in an internal memo that the division has been "operating at margins that are 3-10x lower than comparable platform and publishing businesses" and that studios have been losing 64 cents for every dollar invested3
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Source: New York Post
As part of the gaming division restructuring, Microsoft is spinning off four Xbox game studios to operate independently or under new ownership
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. Compulsion Games and Double Fine Productions will become independent entities while retaining their intellectual property and game catalogs, while Ninja Theory and Undead Labs have entered agreements to join new owners with funding to continue current projects. Additionally, Arkane's management in France has begun consultation with its works council to review "potential strategic options" that could result in closure or sale5
.Microsoft Revamps Salesforce for AI-Driven Transformations
The commercial sales reductions build directly on Microsoft's recent launch of the Microsoft Frontier Company business unit, backed by a $2.5 billion investment to embed 6,000 engineers inside enterprise clients
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. This initiative focuses on delivering enterprise AI deployments using the company's existing AI tools and forward-deployed engineers, reflecting a shift from traditional sales roles to more technical, customer-facing positions3
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Source: Seattle Times
Brad Smith, Microsoft's president and vice chair, emphasized that software development is undergoing its biggest shift in the more than 50 years since Microsoft's founding. "Some things like coding require less time of software developers," Smith noted, while acknowledging that new roles are emerging in product management, software design, and direct customer engagement
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. Coleman confirmed in her memo that while the eliminated roles "are not being replaced by AI," the technology is fundamentally changing how work gets done, requiring employees to focus on re-skilling and workforce adaptation1
.Related Stories
Tech Industry Job Cuts Accelerate Amid AI Infrastructure Push
The Microsoft layoffs contribute to a broader wave of tech industry job cuts that has seen close to 154,000 people lose their jobs in the first half of 2026 alone, with major companies like Meta, Oracle, Amazon, and Cognizant cutting thousands of workers
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. U.S. tech companies have announced 123,653 cuts so far in 2026, up 66% from the same period in 2025, according to outplacement firm Challenger, Gray & Christmas4
.AI has emerged as the most commonly cited reason for job cuts for three consecutive months, with 38,579 cuts attributed to AI in May alone—the highest monthly total since tracking began in 2023
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. For the year, AI has been linked to 87,714 cuts, already surpassing the 54,836 attributed to it in all of 2025. This pattern reflects what many see as a correlation between increased AI spending and job reductions across the industry.Voluntary Retirement Program Reduces Operating Expenses Impact
Microsoft attempted to minimize the scale of forced layoffs through its first-ever voluntary retirement program, which saw approximately 30% of the roughly 8,750 eligible U.S. employees accept buyout offers
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. Eligible employees—those whose combined years of service and age totaled 70 or more—received packages including five years of healthcare coverage access, lump sum cash severance payments, and six months of vesting for unvested stock options2
.Coleman indicated that Microsoft plans to make voluntary exit programs a regular part of operations rather than one-time offers, potentially allowing employees to opt in annually or on an ongoing basis
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. Over the past year, Microsoft has redeployed more than 4,000 employees into new roles, including another 500 in the month preceding the announcement1
. However, Coleman's memo contained a warning that may concern remaining employees: "We are still early on this journey, and there will be more changes ahead; other parts of our business will need to make similar changes"3
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