Microsoft is reportedly preparing for another round of layoffs that could affect less than 2.5% of its global workforce, as the company realigns its operations to support its growing investments in artificial intelligence (AI). According to multiple reports, the job cuts could be announced as early as next week and may impact thousands of employees across key business divisions.
The reported restructuring is expected to primarily affect employees in sales, consulting and the Xbox gaming division, although the exact number of roles to be eliminated has not been officially confirmed. With a global workforce of around 220,000 employees, a reduction of under 2.5% would still translate to several thousand job cuts.
According to a Business Insider report, some affected employees may be offered alternative roles within Microsoft, indicating that the company is looking to redeploy talent where possible rather than relying solely on workforce reductions.
The reported layoffs come as Microsoft continues to invest aggressively in AI infrastructure, data centres and next-generation technologies. The company has been streamlining costs across its operations while significantly increasing capital expenditure on AI, a strategy that mirrors similar moves by other global technology companies.
The timing is also notable. Microsoft has historically announced organisational changes around the beginning of its new fiscal year on July 1, making this period a common window for restructuring and workforce realignment.
This would not be Microsoft’s first workforce reduction in recent months. In 2025, the company eliminated around 15,000 jobs across multiple rounds of layoffs. Earlier this year, it also introduced a voluntary retirement programme for eligible long-serving employees in the US, a move that reportedly reduced the scale of compulsory layoffs expected this year.
The reported restructuring comes amid broader changes across the technology industry, where companies are increasingly redirecting resources towards AI while tightening operational costs. Microsoft has continued to expand its AI capabilities through products such as Copilot and major investments in AI infrastructure, even as it reduces headcount in selected business functions.
