Microsoft Layoffs 2026: Company May Cut Thousands of Jobs

Microsoft layoffs 2026 may begin as early as next week, according to a new report. The company is reportedly preparing another round of job cuts that could affect fewer than 2.5% of its global workforce.
A report from Business Insider says the layoffs could impact thousands of employees. However, Microsoft has not confirmed the report. The company also declined to comment. The reported cuts may affect several departments. For example, sales, consulting, and the Xbox gaming division are expected to see job reductions. Microsoft employed around 228,000 full-time workers as of June 30, 2025. Therefore, even a small percentage would represent thousands of positions.

AI Spending Drives Cost-Cutting

Many technology companies are reducing staff while increasing investments in artificial intelligence. As a result, businesses are shifting resources toward AI infrastructure and new technologies. Earlier this month, reports suggested Microsoft was reviewing the future of its Xbox business. The company is reportedly considering a restructuring or a separate subsidiary for the gaming unit.
This would not be Microsoft’s first major workforce reduction. In July 2025, the company announced layoffs affecting nearly 4% of its employees. That move ranked among its largest job cuts in recent years.
The broader tech industry is also seeing similar changes. Meta previously announced plans to reduce about 10% of its workforce. Meanwhile, Amazon revealed plans to eliminate roughly 16,000 jobs worldwide.
Although Microsoft has not officially confirmed the latest report, many employees are waiting for further updates. If announced, the layoffs would mark another major step in the company’s ongoing effort to balance costs while expanding its AI strategy.