Microsoft plans another round of layoffs, may cut less than 2.5% of workforce: Report
Microsoft plans to reduce its workforce by less than 2.5% in its latest round of layoffs. Reuters reported by quoting Business Content News published on Tuesday. The report, based on people familiar with the matter, stated that the company could announce layoffs as early as next week. Reuters could not independently verify the report.
The planned layoffs are expected to affect thousands of employees across different teams. Positions in Microsoft’s Xbox gaming business are also likely to be affected, as are roles in sales and consulting.
Here are the important details you need to know about this reported layoff.
Thousands of employees may be affected
As of June 30, Microsoft had approximately 228,000 full-time employees worldwide, according to the company’s filing with the U.S. Securities and Exchange Commission (SEC). Reuters reported.
A reduction in the workforce of less than 2.5% would still result in thousands of workers losing their jobs. The report stated that more than one business unit is expected to be involved in the latest layoffs, although the exact number of affected employees was not disclosed.
Xbox division also expected to see layoffs
Microsoft’s Xbox gaming business is also expected to be part of the latest layoffs. Reuters report.
It was reported earlier this month that Xbox was preparing for significant layoffs, as well as cuts to marketing and other budgets. The report comes after Microsoft increased prices of Xbox gaming consoles in several markets, citing rising costs due to global component shortages.
It was also reported in June that Microsoft was considering different options for its gaming business. These reportedly include restructuring Xbox into a wholly owned subsidiary or exploring a potential spinoff. Microsoft has not publicly confirmed these plans.
Following major layoffs announced last year
The latest reported layoffs come after Microsoft announced one of its largest workforce reductions in recent years.
In July 2025, the company said it would lay off approximately 4% of its global workforce. The move was part of wider efforts to reorganize parts of the business while continuing to invest in key areas.
Microsoft has made numerous layoffs in recent years.
Technology companies continue to reduce their workforce
Microsoft isn’t the only technology company reducing its workforce. Many large companies in the tech sector have announced layoffs this year as they balance cost management with ongoing investments in artificial intelligence.
Meta announced earlier this year that it planned to reduce its workforce by approximately 10%. Amazon also announced plans to eliminate approximately 16,000 jobs worldwide.
“US companies have continued to reduce headcount in recent months, with a new wave of layoffs in the technology, media and finance sectors as they rein in costs while investing heavily in AI infrastructure.” Reuters mentioned.
