Microsoft Plans to Lay Off Thousands Amid Cost-Cutting Measures

Microsoft is set to carry out another round of employee layoffs, affecting less than 2.5% of its total workforce as part of its cost reduction efforts, while maintaining its expansion in artificial intelligence investments.

Business Insider, citing informed sources, reported that the company may announce the layoffs early next week. The cuts are expected to impact thousands of employees, including those in sales and consulting departments, as well as positions within the Xbox gaming division.

This move aligns with ongoing trends among American companies, particularly in technology, media, and finance sectors, which are reducing staff numbers to control expenses while heavily investing in AI infrastructure.

According to Microsoft's latest disclosures, the company employed approximately 228,000 full-time workers as of June 30, 2025.

Earlier media reports indicated that the Xbox unit plans significant job reductions alongside cuts in marketing budgets and other expenditure items. The company is also considering restructuring options for the unit, including spinning it off as an independent company or reorganizing it as a wholly owned subsidiary.

In July 2025, Microsoft announced layoffs amounting to roughly 4% of its workforce, marking one of the largest job cuts it has implemented in recent years.

This development occurs amid a broader wave of workforce reductions in the technology sector. Meta has revealed plans to reduce its workforce by 10%, while Amazon has announced intentions to eliminate about 16,000 jobs worldwide, coinciding with increased spending on AI technologies.