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Microsoft Corporation is reportedly preparing to announce another round of layoffs next week for thousands of employees in sales, consulting and other areas. Xbox The gaming business is expected to suffer.
Microsoft is reportedly preparing smaller layoffs than last year
Microsoft is planning workforce cuts that are expected to affect thousands of employees, although the cuts are expected to be smaller than those announced last year, Business Insider reported Tuesday, citing people familiar with the matter.
The layoffs are likely to affect less than 2.5% of Microsoft’s global workforce of approximately 220,000 people. The company could announce cuts as soon as next week, although the timing could change.
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Some of the employees whose positions will be cut may be immediately offered other positions within the company, according to one of the people cited in the report.
The expected layoffs will reportedly primarily affect sales, consulting and Microsoft’s Xbox gaming division.
In an emailed statement, Benzinga said Microsoft had “nothing to share” on the report.
Investments in artificial intelligence and cost control are driving workforce change
The latest workforce cuts come as Microsoft continues to increase spending on infrastructure and artificial intelligence services while trying to control operating costs.
Earlier this year, Microsoft introduced a voluntary retirement program for eligible long-serving US employees. About 9,000 employees are eligible for the program, representing about 7% of the company’s U.S. workforce, the report said.
About a third of employees eligible for buyouts accepted the buyout offer, reducing the need for deeper layoffs compared with last year, according to one person familiar with the situation.
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Layoffs rise as investment in artificial intelligence infrastructure increases
The tech industry has seen a sharp rise in layoffs as companies increase spending on artificial intelligence infrastructure, with more than 81,000 job cuts in the first quarter of 2026.
Several tech companies have linked recent staff cuts to the growing adoption of artificial intelligence.
In May, Cloudflare Inc. said its decision to cut 20% of its workforce was partly driven by increased use of artificial intelligence tools, while Cisco Systems Inc. said changes related to artificial intelligence were taken into account in its plan to cut about 4,000 jobs.
During the same month Meta Platforms, Inc. laid off about 8,000 employees, or about 10% of its workforce. The company also abandoned plans to fill approximately 6,000 open positions.
Coinbase Global Inc. And Block Inc. also announced significant layoffs as it expands its use of AI in its business.
However, not everyone believes that AI is already a major driver of massive job losses. In May, Nvidia company General manager Jensen Huang criticized executives who link layoffs to artificial intelligence.
Huang called such explanations “lazy” and said companies have not yet adopted AI at a scale that would justify replacing large segments of their workforce.
Photo: gguy/Shutterstock
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