Microsoft to layoff over 5,000 employees across teams

Microsoft is reported to conduct fresh round of layoffs that could impact nearly 2.5% of the workforce globally across teams. According to a Business Insider report, the workforce reduction may impact sales, Xbox gaming division, and consulting, while it continues to invest heavily in Artificial Intelligence (AI) infrastructure. 

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Microsoft layoffs

Microsoft has approximately 220,000 employees, which means over 5000 employees could be impacted worldwide. However, it suggests that this year's layoffs are less extensive than those carried out last year. However, the company also gave thousands of employees a voluntary retirement programme to US employees whose combined age and years of service were calculated at 70. The move was introduced as part of its broader workforce restructuring efforts.

In May 2025, Microsoft laid off about 6,000 employees, and later in July, it cut another 9,000 jobs. Together, these layoffs affected around 15,000 employees, or roughly 4% of Microsoft's workforce at the time. Now, the latest layoffs are part of Microsoft's broader strategy to control costs while it's investing heavily in artificial intelligence (AI).

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Microsoft is currently facing mounting pressure from investors over fears that generative AI could replace its traditional software business. In addition, the company's shares have fallen roughly 17% in the past month.

Now, Microsoft also joins the layoff wave as big tech giants, including Google, Amazon, Meta, Oracle, and other cuts thousands of jobs globally. However, it should be noted that the Microsoft layoffs have not been confirmed by the company.

On the other hand, Xbox is also navigating a challenging period with price hikes of $150 across its consumer products amid growing hardware costs. The team is also conducting a broader restructuring aimed at reducing costs and aligning resources with Microsoft's long-term AI strategy.