Microsoft is gearing up for a new round of layoffs expected to hit less than 2.5% of its global workforce. The cuts will affect sales, consulting, and the Xbox gaming division. The announcement is due as soon as next week.
This round is smaller than last year’s drastic reductions. In 2025, Microsoft axed 6,000 roles in May and 9,000 in July. The July cuts alone accounted for about 4% of its workforce, which stood at roughly 228,000 full-time employees at mid-2025.
Some employees losing their jobs may receive immediate offers for alternative roles. This approach aims to soften the blow while streamlining teams.
Earlier this year, Microsoft launched a voluntary retirement program targeting U.S. staff at level 67 and below who met a combined age and service threshold of 70. About 7% of the 125,000 U.S. employees qualified, roughly 9,000 people. Nearly one-third of those eligible opted for the buyout.
Financially, Microsoft is far from troubled. For the quarter ending March 31, 2026, revenue rose 18% year-on-year to $82.9 billion. Operating income jumped 20% to $38.4 billion, and net income surged 23% to $31.8 billion. Microsoft Cloud revenues climbed 29% to $54.5 billion, and the company’s commercial remaining performance obligation nearly doubled to $627 billion.
Microsoft’s AI business is booming, hitting an annual revenue run rate of $37 billion — up 123% year-over-year. Productivity and Business Processes revenue rose 17%, boosted by a $3.7 billion increase in Microsoft 365 commercial products and cloud services.
Despite strong financials, Microsoft faces regulatory scrutiny. In June 2026, the UK Competition and Markets Authority opened a strategic market status investigation into its business software ecosystem.
The gaming division is also under pressure. Xbox CEO Asha Sharma sent a memo describing a business reset amid ongoing restructuring.
As Microsoft tightens its workforce, the layoffs show a more cautious approach than last year’s large-scale cuts. The company continues to juggle growth, AI expansion, and regulatory challenges while trimming staff.
Based on
- Microsoft to cut thousands of jobs in upcoming redundancy round — techmonitor.ai
- Microsoft Plans Job Cuts Next Week; Thousands Of People Likely To Be Impacted — freepressjournal.in
- Media reports indicate that Microsoft is planning to lay off thousands of employees. Is this a good sign? – Oninvest — en.oninvest.com
- Microsoft eyes thousands of new job cuts in coming days – U2fx.com — u2fx.com
- Microsoft to cut under 2.5% of workforce – report — rte.ie
