Business

Microsoft Plans Fresh Layoffs, Thousands Of Jobs At Risk Across Sales, Xbox: Report

Thousands of Microsoft employees could be affected as the tech giant reportedly prepares another round of layoffs across multiple business divisions

PGurus Newsdesk

July 1, 2026

Microsoft is reportedly preparing another round of layoffs affecting thousands of employees as it restructures operations and accelerates investments in artificial intelligence

Tech giant may cut less than 2.5% of its global workforce as it continues cost-cutting while ramping up investments in artificial intelligence

Microsoft is preparing another round of job cuts that could affect thousands of employees across multiple divisions, according to a report by Business Insider. The layoffs, expected to be announced as early as next week, would impact less than 2.5 per cent of the company’s global workforce.

The latest restructuring is expected to hit employees in sales, consulting and Microsoft’s Xbox gaming division as the company continues to streamline operations while investing heavily in artificial intelligence infrastructure.

According to the report, the layoffs will affect thousands of roles, although the exact number has not been disclosed. Reuters could not independently verify the report, and Microsoft has not issued an official response.

As of June 30, 2025, Microsoft employed around 228,000 full-time workers worldwide, according to its filing with the US Securities and Exchange Commission (SEC).

Xbox division faces deeper restructuring

The report comes amid growing uncertainty surrounding Microsoft’s gaming business. Earlier this month, Bloomberg reported that Xbox was planning significant layoffs alongside deep cuts to marketing and operational budgets after raising console prices globally due to rising component costs.

Separately, The Information reported that Microsoft is exploring strategic options for Xbox, including a possible restructuring or spinning the gaming business into a wholly owned subsidiary.

AI investments reshape workforce

Microsoft’s latest workforce reduction reflects a broader trend across the technology industry, where companies are cutting costs in traditional business areas while redirecting resources towards artificial intelligence.

The company had already announced one of its biggest workforce reductions in recent years in July 2025, when it laid off nearly four per cent of its employees.

Several other major technology companies have also announced large-scale job cuts this year. Meta has unveiled plans to reduce around 10 per cent of its workforce, while Amazon is expected to eliminate nearly 16,000 jobs globally as companies continue reshaping operations amid the AI boom.

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