Microsoft is reportedly preparing for another round of layoffs, with an announcement expected as early as next week. The move comes as the tech giant continues to invest heavily in artificial intelligence while looking to reduce costs in other areas of the business.
According to a report by Business Insider, Microsoft is considering cutting just under 2.5 percent of its global workforce, which currently stands at around 220,000 employees. If implemented, the layoffs could affect approximately 5,500 workers.
This would not be Microsoft’s first round of workforce reductions. Between May and July last year, the company eliminated around 15,000 jobs, representing nearly 4 per cent of its global workforce at the time. Earlier this year, Microsoft also offered voluntary separation packages to approximately 8,750 eligible employees.
When contacted by India Today Tech for a response, Microsoft declined to comment on the reported layoffs.
Which Microsoft Roles Could Be Affected by the Next Round of Layoffs?
According to the report, the latest round of layoffs could affect employees across multiple business units, including sales, consulting and the Xbox gaming division. Speculation about job cuts in Xbox intensified after the division’s new CEO, Asha Sharma, announced a strategic reset for the business.
The report also suggests that some affected employees may be offered opportunities to transition into other roles within Microsoft. It adds that the planned reduction of around 2.5 per cent of the workforce could have been larger had the company not offered voluntary separation packages earlier this year. Of the approximately 8,750 employees who received the offer, nearly one-third reportedly opted to leave, broadly matching Microsoft’s expectations.
The reported layoffs come as Microsoft looks to rein in operating expenses while significantly increasing its investments in artificial intelligence. The company is investing billions of dollars in AI and cloud infrastructure to strengthen its position in the rapidly evolving AI market.
Microsoft is not alone in trimming its workforce amid rising AI investments. In May, Meta reportedly cut around 8,000 jobs, representing nearly 10 per cent of its global workforce. Other major technology companies, including Oracle, Amazon and PayPal, have also announced thousands of layoffs in recent months.
According to Layoffs.fyi, technology companies have collectively laid off 122,524 employees so far in 2026. For comparison, the sector recorded a total of 124,636 job cuts throughout 2025.