Microsoft is preparing the now usual wave of layoffs in the middle of the year in order to contain costs. Now it is reported that this round will once again affect thousands of employees. In addition to the Xbox department, the sales and consulting areas are also mentioned. However, this workforce reduction is likely to affect fewer people than before. This time, less than 2.5 percent of the workforce of 220,000 employees will be laid off. That amounts to a maximum of 5,500 colleagues.
Read more after the ad
There were already reports last week that Microsoft was planning another wave of layoffs. The background is that Microsoft is spending a lot of money on artificial intelligence (AI). Management is therefore looking for savings potential elsewhere. The group is also putting the red pencil in the games sector. As part of the comprehensive restructuring under the new Xbox boss Asha Sharma, who has headed the gaming division since February, several well-known Xbox studios are facing closure.
Further job creation after severance pay offers
Microsoft is planning the new wave of layoffs for next week, writes Business Insider, citing people familiar with the matter. However, these plans could change in the short term. It is said that some of the employees affected by the job cuts should be offered new tasks immediately.
These plans represent the next stage of workforce reductions at Microsoft. In April, Microsoft wanted to cut almost 9,000 jobs with severance pay due to AI costs. Around 7 percent of the 125,000 US employees were able to make use of it. It is now said that around a third of the employees have accepted the offer. This corresponds to the group’s expectations, so that the layoffs that are now usual for the middle of the year are correspondingly less extensive.
Falling share price puts pressure on Microsoft
Exactly a year ago, at the beginning of July 2025, Microsoft laid off up to 9,000 employees. The positions eliminated corresponded to 4 percent of the total workforce. At that time, it was the largest wave of layoffs since 2023 and it also affected jobs at game studios in Europe. However, Microsoft had already laid off thousands of employees two months earlier as part of “organizational changes.” With around 6,000 employees, 3 percent of the workforce was affected – “at all levels, in all teams and in all regions”.
Read more after the ad
Compared to the previous year, the planned job cuts of less than 2.5 percent are relatively moderate. However, Microsoft apparently feels under pressure to implement cost-cutting measures. The share price had temporarily fallen by 20 percent in the last four weeks and has only recovered somewhat in the last few days. On yesterday’s trading day alone, the stock jumped 3 percent, which may be due to the report about the new wave of layoffs.
Read also
(fds)
