Microsoft is preparing for another round of layoffs that could affect thousands of employees across several business units, according to multiple media reports.
Advertisement
As part of a global restructuring, the company is expected to reduce up to 2.5% of its worldwide workforce. While Microsoft has not announced country-specific impacts, India is unlikely to be completely insulated from the job cuts.
The latest move would mark Microsoft’s third major workforce reduction in recent months, highlighting the growing pressure on technology companies to balance rising AI investments with profitability.
Sales, Consulting, and Xbox Teams Expected to Be Hit
According to reports, the layoffs will primarily affect employees in Microsoft’s sales, consulting, and Xbox gaming divisions.
Advertisement
While the company has not officially confirmed the plans, the cuts are expected to impact less than 2.5% of Microsoft’s global workforce, which stood at approximately 220,000 employees as of June 2025. This translates to several thousand jobs.
The planned restructuring is expected to be smaller than the layoffs carried out in 2025, when the company eliminated nearly 15,000 jobs through multiple rounds of workforce reductions.
The announcement is expected next week, around the beginning of Microsoft’s new fiscal year. The company has historically used this period, which starts on July 1, to implement major organizational changes, including workforce restructuring and layoffs.
AI Investments Continue to Drive Cost-Cutting
Advertisement
Microsoft has emerged as one of the biggest investors in artificial intelligence following its partnership with OpenAI. The company has committed tens of billions of dollars toward AI infrastructure, including data centres, advanced chips, and AI-powered services such as Copilot.
These investments have significantly increased capital expenditure, prompting Microsoft to look for savings in other parts of the business. Analysts say workforce restructuring has become one of the ways large technology companies are protecting profit margins while continuing aggressive AI expansion.
Earlier this year, Microsoft also reportedly slowed hiring in parts of its cloud and North American sales businesses while continuing recruitment for AI-focused teams.
Xbox Business Undergoing Major Restructuring
Microsoft’s gaming business is also undergoing significant changes. Earlier reports indicated that the Xbox division was preparing for substantial layoffs and budget reductions following weak console sales and slower-than-expected growth in subscription gaming.
The gaming unit has faced increasing pressure to improve profitability after years of heavy investment in content, hardware, and acquisitions. Reports suggest Microsoft is reviewing the long-term structure of the Xbox business while focusing on operational efficiency.
Part of a Broader Tech Industry Trend
Microsoft’s latest restructuring reflects a wider trend across the technology industry. Companies including Meta, Amazon, Oracle, and several others have announced workforce reductions this year as they redirect spending toward AI development and automation.
Many firms are reducing roles in traditional business functions while increasing investment in AI engineering, cloud infrastructure, and machine learning capabilities. Industry experts believe this shift represents a long-term transformation in how technology companies allocate talent and capital rather than a short-term cost-cutting exercise.
Microsoft has not officially confirmed the latest round of layoffs or disclosed the exact number of employees who may be affected. However, reports indicate that an announcement could be made within days as the company begins its new fiscal year.
Advertisement
Note: We are also on WhatsApp, LinkedIn, and YouTube to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, YouTube – Click Here, and LinkedIn– Click Here.
About the Author
Sheetal Singh
Contributing Writer