Microsoft has decided to lay off thousands of employees as part of its ongoing efforts to reduce costs, with the company’s Xbox gaming and sales divisions expected to be among the hardest hit.
According to sources familiar with the matter, the latest round of job cuts will affect employees across several business units, including sales, consulting, and the Xbox gaming division. An official announcement is expected next week.
The planned layoffs are expected to impact less than 2.5% of Microsoft’s global workforce of approximately 220,000 employees, making the reduction smaller than the company’s previous round of layoffs.
Speculation about the restructuring intensified following a recent internal memo from Xbox Gaming’s new chief, Asha Sharma, indicating that the company was reviewing operations within its gaming business. The restructuring is aimed at streamlining operations and improving efficiency across the division.
The workforce reduction comes as Microsoft continues to significantly increase its investment in artificial intelligence (AI), while seeking to offset rising AI-related expenditures by reducing traditional operating costs.
The company is also facing growing pressure from investors over the rapid pace of AI development and concerns about its long-term impact on conventional software services.
According to reports, Microsoft’s shares have declined by approximately 19% over the past month, marking one of the company’s weakest monthly performances since the dot-com era.
Earlier this year, Microsoft also introduced a voluntary retirement programme for eligible employees in the United States.
Around 9,000 employees qualified for the programme, with roughly one-third opting to leave the company voluntarily.
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