It is reported that Microsoft is preparing for another large-scale workforce reduction. According to information obtained by Reuters from a Business Insider report, Microsoft may lay off thousands of employees in the coming days.
Scale and Areas of Impact
This reduction is expected to affect less than 2.5 percent of the company's total workforce. Since Microsoft has about 220,000 employees globally, the projected number of layoffs could be around five thousand or fewer. According to reports, the sales, consulting, and Xbox gaming divisions may be the most affected.
Although no official statement has been issued by the company yet, several authoritative sources claim that this decision might be made at the start of the new fiscal year.
Reasons for Cost Optimization
The primary reason for the cuts is the need to reduce operating costs amid significant investments by Microsoft in artificial intelligence (AI). The company is actively expanding its partnership with OpenAI, building new data centers for AI, and spending billions of dollars on products like Copilot. Consequently, the company is continuously reducing its staff to control expenses.
The report emphasizes that Microsoft aims not only to cut costs but also to restructure its business to meet the demands of AI. This is why personnel numbers are being reduced in teams where work can be automated or performed using AI.
Changes in the Gaming Segment
Changes are also being prepared in Microsoft's gaming business, i.e., Xbox. A large-scale restructuring has recently been discussed within Xbox. Following the arrival of new leadership, the business is planned to be relaunched, which could lead to the elimination of several positions and the reorganization of some teams in the gaming division.
Previous Reduction Experience
Staff reductions are not a new phenomenon for Microsoft. Last year, the company also conducted layoffs in several phases, affecting thousands of employees. One of the main reasons cited then was also the increase in investments in AI alongside cost reduction.
Microsoft is not the only company reducing staff. By 2026, major tech corporations such as Meta, Amazon, Oracle, LinkedIn, Coinbase, and Groupon have either already downsized or announced such plans. Many companies openly state that their working methods are changing due to AI, and in the future, a smaller number of employees will perform more work.
