Microsoft plans thousands of job cuts across sales, Xbox, consulting units – Report

Microsoft is preparing to announce another round of job cuts that are expected to affect thousands of employees across sales, consulting, and its Xbox gaming division, according to a Business Insider report, citing people familiar with the development.

This comes as the technology giant continues to rein in costs while ramping up spending on artificial intelligence.

The cuts are projected to affect less than 2.5% of Microsoft’s 220,000-person global workforce, making this round smaller than the layoffs the company carried out last year, according to people familiar with the situation who asked not to be identified discussing sensitive matters.

What the report is saying

According to Business Insider, Microsoft plans to announce the layoffs as early as next week. However, the exact timing could change, with some affected employees expected to be offered alternative roles within the company immediately.

The planned cuts follow a pattern Microsoft has established in recent years of trimming its workforce around the start of its new fiscal year, which begins on July 1.

• The report says that last year, Microsoft eliminated 6,000 roles in May and an additional 9,000 employees, representing about 4% of its workforce, in July, making this year’s anticipated round considerably smaller by comparison.
• Earlier this year, Microsoft offered voluntary retirement buyouts to US employees at level 67 and below who had a combined 70 or more years of age and service. About 7% of its 125,000-strong US workforce, roughly 9,000 employees, were eligible for the programme.
• Sales employees with commission-based compensation were excluded from the retirement buyout offer, according to an internal document viewed by Business Insider.

Xbox layoffs have been widely anticipated since new gaming division CEO Asha Sharma sent a memo to employees calling for a “reset” of the business, signalling that structural changes were coming to one of Microsoft’s most prominent consumer divisions.

More insights

According to Business Insider, the planned cuts reflect the broader pressure Microsoft is navigating as it tries to balance aggressive AI investment with Wall Street’s growing concerns about cost discipline and the potential for AI to cannibalise some of its own software services.

Microsoft’s stock has fallen about 19% over the past month, its steepest monthly decline since the dot-com era, reflecting investor anxiety about the pace and cost of AI spending relative to near-term revenue returns.

The company has been under particular scrutiny over concerns that AI tools could eventually replace software services across the industry, including, in theory, some of Microsoft’s own core product offerings, creating a strategic tension between investing in AI and protecting the revenue streams that AI might one day disrupt.

What you should know

Microsoft is not the only global tech giant making job cuts amid AI adoption.

Nairametrics earlier reported that Oracle eliminated approximately 21,000 jobs worldwide over the past year as the technology giant accelerated a restructuring of its operations to strengthen its focus on artificial intelligence.

The workforce reduction was disclosed in the company’s latest annual report, which showed that Oracle’s global full-time headcount declined from about 162,000 employees to 141,000 as of May 31, 2026.

The layoffs represent roughly 13% of the company’s workforce and resulted in $1.8 billion in severance payments and restructuring charges during the financial year—almost five times higher than the $374 million Oracle recorded for restructuring costs in the previous year.