Microsoft

Microsoft is preparing to cut staff again. The Redmond giant is set to announce, according to sources close to the matter, a new wave of layoffs that will affect thousands of employees in the sales and consulting departments, as well as the Xbox division.

The scale of the cut, as reported by Business Insider, will remain below 2.5% of the total workforce, estimated at around 220,000 people (the last balance sheet filed with the SEC on June 30, 2025, indicated 228,000 employees). This is a small percentage that, given the size of the company, still translates into thousands of jobs lost.

The official announcement is expected next week, although the exact timing may slip. Some of the affected employees will reportedly be offered alternative roles within the company.

Xbox Facing a Reset

However, this new round of layoffs will be lighter compared to what happened a year ago. In May 2025, Microsoft eliminated 6,000 positions, followed by an additional cut of 9,000 employees in July, amounting to about 4% of the total workforce.

The impact of this year has been mitigated by the early retirement program launched at the beginning of 2026. Microsoft offered an exit incentive to American employees up to level 67, with at least 70 years combined between age and years of service.

Out of the approximately 9,000 American workers who met the criteria (7% of the U.S. workforce, equivalent to 125,000 people), about a third accepted the proposal, a figure in line with internal expectations. Commission-based sales employees were excluded from the offer, according to an internal document.

In the gaming division, the cuts do not come as a surprise. Xbox's new CEO, Asha Sharma, sent a memo to employees announcing a complete reset of the business, to be completed according to a 100-day plan. The layoffs in the console and gaming sector were therefore already widely anticipated by those in the industry, who had been following the evolution of the restructuring desired by management for months.

The context in which these new departures are taking place is that of a company shifting significant resources towards infrastructure for artificial intelligence, under pressure from Wall Street, concerned that AI may eventually reduce demand for some of Microsoft's software services. The stock has lost about 19% in the last month, the worst monthly performance since the dot-com bubble. This figure adds pressure to a company already tasked with balancing investments in AI and controlling operational costs.

July cuts have become a norm for Microsoft, which aligns the start of its fiscal year with July 1st. This recurrence has transformed into a regular appointment for workforce review year after year.