Microsoft to cut thousands of jobs across sales, consulting, and Xbox

Microsoft ↗ 1.62% is preparing to cut under 2.5% of its roughly 220,000-person workforce in another round of layoffs expected to be announced as early as next week, according to a Business Insider report published on Monday.straitstimes+2

The cuts will impact thousands of roles across the company's sales, consulting, and Xbox gaming divisions, people familiar with the matter told Business Insider. Some affected employees will be offered new positions immediately, the report said.africa.businessinsider

A Year of Continuous Trimming

The planned reductions would be smaller than Microsoft's layoffs last July, when the company eliminated approximately 9,000 positions — less than 4% of its global staff — at the start of its fiscal year 2026. In April, Microsoft offered voluntary buyouts to 8,750 U.S.-based employees under a "Rule of 70" formula tied to age and tenure, marking the first such program in company history.cnbc+2

The Xbox gaming division has been bracing for cuts since early June, when Bloomberg reported that new Xbox CEO Asha Sharma was planning major layoffs as part of a broader organizational overhaul. That reporting described the cuts as part of a "reset" of the gaming business following Microsoft's $68.7 billion acquisition of Activision Blizzard.reuters+2

Big Tech's AI Pivot

The latest round fits a pattern across large technology companies of reducing customer-facing and operational headcount while pouring tens of billions into artificial intelligence infrastructure. Microsoft has steadily cut roles over the past three years as it diverts spending toward AI. Earlier this year, Meta Platforms ↘ 4.90% announced layoffs and buyouts that could affect thousands of its own employees for similar reasons.youtube+1

Microsoft's fiscal year ends on June 30, and layoff announcements have frequently coincided with fiscal year transitions at the company. The timing of next week's expected announcement would place it at the start of fiscal year 2027.