Microsoft to slash thousands of jobs as AI – Business News
Microsoft is reportedly planning yet one more spherical of layoffs that may slash thousands of roles subsequent week in an effort to cut prices, as considerations about out-of-control AI spending mount.
Less than 2.5% of the company’s 220,000-person workforce – or fewer than 5,500 employees – might be axed from the gross sales and consulting divisions, as properly as Xbox’s gaming unit, in accordance to Business Insider.
The Redmond, Wash.-based software program giant plans to announce the layoff spherical subsequent week, simply after the beginning of its new fiscal 12 months on Wednesday, although the timing may change, sources instructed the outlet. Some impacted workers might be provided new roles within the company instantly.
Microsoft CEO Satya Nadella speaks at CES 2024, a huge tech convention, in Las Vegas on Jan. 9, 2024. Getty Images
Microsoft declined to remark.
It would mark its third main spherical of layoffs in simply over a 12 months, after slashing 6,000 jobs final May and one other 9,000 – or 4% of its workforce – final July.
Amid the speedy rise of AI, the company has been going through each considerations that it’s spending an excessive amount of on the new tech – with commitments of $190 billion on new infrastructure over the approaching years – and fears that bots may render conventional software program instruments out of date.
Shares in Microsoft tanked 19% in June for the stock’s worst month for the reason that dot-com crash of the early 2000s.
News of extra layoffs comes as little shock after Microsoft earlier this 12 months launched a voluntary retirement buyout spherical for US workers whose years of employment and age are 70 or greater when added collectively.
About a third of the company’s 9,000 eligible employees took the offer, permitting Microsoft to cut fewer roles on this 12 months’s anticipated layoff spherical, a source instructed Business Insider.
Layoffs have additionally been anticipated in Microsoft’s gaming unit, after new Xbox CEO Asha Sharma referred to as for a “resetting” of the company,” saying it was “not in a healthy spot” amid declining income.
Xbox lately hiked costs for its {hardware} ofr the third time since late 2025. CFOTO/Future Publishing through Getty Images
Xbox has spent the previous two years closing studios, canceling new sport releases and raising costs on its consoles as skyrocketing information middle demand for chips sends element costs greater.
Last week, Apple blamed chip shortages as it hiked costs for its computer systems, tablets and home gadgets by as a lot as $500.
Xbox rapidly adopted swimsuit with its third price hike on {hardware} since late 2025, raising costs by $150 throughout its suite of gaming consoles.
So far this 12 months, practically a third of all job cuts have hit the tech sector – and AI got here in as the main cause for introduced layoffs in June for the fourth month in a row, in accordance to a Challenger, Gray & Christmas report launched Wednesday.
Microsoft and Apple have blamed latest price hikes on greater element prices amid chip shortages. REUTERS
“The pace of layoffs cooled considerably in June, similar to plans last June, and as is typical for summer months,” Andy Challenger, the firm’s office knowledgeable and chief income officer, stated in a assertion.
“That said, the cuts we are seeing remain concentrated in technology, and artificial intelligence continues to reshape how companies think about headcount.”
Since 2023, when AI first emerged as a driving pressure in layoffs, the new tech has been cited in 173,568 job cut bulletins, in accordance to Challenger.
