Microsoft eyes fresh layoffs across sales, consulting and Xbox teams: Report

Microsoft is reportedly preparing another round of job cuts, with sales, consulting and Xbox teams expected to be among the most affected, according to Business Insider.

The publication, citing people familiar with the matter, reported that the company plans to cut under 2.5% of its global workforce, with an announcement potentially coming as early as next week. Reuters said it could not independently verify the report.

The latest move, if confirmed, would mark another phase in Microsoft's ongoing workforce restructuring as the technology giant continues to balance cost management with significant investments in artificial intelligence.

Report points to thousands of roles being affected

According to Business Insider, the proposed layoffs are expected to impact thousands of employees across multiple business functions.

Key details reported include:

• Under 2.5% of Microsoft's workforce is expected to be affected.
• The reductions are likely to include sales and consulting roles.
• Employees within the Xbox gaming division are also expected to be impacted.
• The announcement could come as early as next week.

Microsoft declined to comment on the report.

As of 30 June 2025, the company employed approximately 228,000 full-time employees, according to its latest annual filing with the US Securities and Exchange Commission (SEC).

Xbox business remains under scrutiny

The reported layoffs come as Microsoft continues to review its gaming operations.

Earlier this month, Bloomberg News reported that Xbox was preparing significant workforce reductions alongside cuts to marketing and other budgets. The report followed the company's decision to increase prices for Xbox gaming consoles globally, citing a worsening global components crisis.

Separately, The Information reported in June that Microsoft was evaluating strategic options for the Xbox business, including a possible spin-off or restructuring it as a wholly owned subsidiary.

The reported job cuts would add to the uncertainty surrounding the future direction of Microsoft's gaming business.

Latest move follows previous workforce reductions

The reported layoffs would follow another major workforce reduction announced by Microsoft in July 2025, when the company said it would eliminate nearly 4% of its workforce. It was one of the company's largest rounds of job cuts in recent years.

The technology sector has continued to see restructuring as companies redirect spending towards AI infrastructure while tightening operational costs.

Several large technology firms have announced workforce reductions over the past year, including:

• Meta, which earlier this year announced plans to reduce 10% of its workforce.
• Amazon, which outlined plans to eliminate approximately 16,000 roles globally.

The trend reflects a broader shift across the industry as companies reassess organisational structures while accelerating investments in AI technologies.

AI investment continues to reshape workforce strategies

Although Microsoft has not confirmed the reported layoffs, the company has continued to position AI as a central pillar of its long-term growth strategy.

Across the technology industry, businesses are increasingly reallocating resources towards AI infrastructure, product development and engineering capabilities, while reviewing headcount across other functions.

If the latest report is confirmed, Microsoft's workforce reduction would represent another example of how major technology companies are reshaping their organisations to align with changing business priorities.