Microsoft is reportedly preparing to announce another significant round of layoffs next week. According to reports from Business Insider, the company aims to reduce its workforce by several thousand positions. This move comes as the tech giant balances aggressive investment in artificial intelligence with pressure from investors to manage costs.
Which divisions are affected?
The upcoming cuts will not be limited to a single department. Reports indicate that the sales, consulting, and Xbox divisions will all feel the impact of these reductions. While specific numbers for each division have not been released, the broad scope suggests a strategic shift in how Microsoft allocates resources across its consumer and enterprise arms.
Scale compared to previous cuts
While “several thousand” sounds substantial, this round is expected to be smaller than the massive reductions seen earlier. The cuts are reported to affect less than 2.5% of Microsoft’s global workforce, which currently stands at approximately 220,000 employees. For context, Microsoft laid off roughly 15,000 workers in 2025 alone—split into two rounds of 6,000 in May and 9,000 in July.
The AI investment trade-off
These layoffs coincide with Microsoft’s continued heavy spending on AI infrastructure and development. Investors have been increasingly vocal about the need for a sustainable business model as AI costs mount. Earlier this year, the company also offered voluntary retirement buyouts to about 7% of its U.S. workforce, affecting roughly 8,750 employees. This marks the first time in Microsoft’s history that such buyouts were offered on this scale.
What this means for you: If you work in sales, consulting, or gaming within the Microsoft ecosystem, stay alert for official communications next week. For general Windows users, these internal shifts may eventually influence product roadmaps, particularly regarding Xbox services and enterprise support structures, though immediate changes to consumer software are unlikely.
Over to you: Do you think Microsoft’s focus on AI justifies these ongoing workforce reductions, or should they prioritize retaining talent in consumer divisions like Xbox?
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