Microsoft plans another round of layoffs, thousands of jobs at risk

Microsoft is preparing another round of layoffs that would affect fewer than 2.5% of its global workforce, a move that would still put thousands of jobs at risk across sales, consulting and Xbox. The cuts would deepen a pattern that has already run through the company’s ranks this year, even as Microsoft invests in AI infrastructure, cloud capacity and the computing power needed to support both.

The company had 228,000 full-time employees as of June 30, 2025, so a cut below 2.5% would still affect thousands of people. Microsoft already said in July 2025 that it would eliminate about 9,000 roles, or less than 4% of its workforce, after earlier trims in January, May and June. Those reductions included less than 1% of headcount in January based on performance, more than 6,000 jobs in May and at least 300 more in June.

Sales and consulting sit outside the center of Microsoft’s AI spending, and Xbox has faced slowing console demand, higher input costs and uncertainty over the long-term shape of the gaming business. Microsoft has been weighing options for Xbox that include restructuring, a spinoff or a joint venture, while subscriptions and cloud gaming have yet to make up for weaker console sales and a thinner lineup of blockbuster releases.

On June 25, 2026, Xbox raised console prices worldwide effective August 1, 2026, lifting 512 GB models by $100 and 1 TB models by $150, while ending the 2 TB version. Xbox said storage and memory prices had risen by more than 2.5 times and expected another doubling by fall 2027.

For the fiscal year ended June 30, 2025, it reported revenue of $281.7 billion and operating income of $128.5 billion, while Azure topped $75 billion in annual revenue for the first time. The company returned $9.4 billion to shareholders in the fourth quarter alone.