Microsoft is preparing to shed staff again, and the timing tells the story. A second major round of cuts within a year is not a reaction to a bad quarter. It reads as a structural reset of how the company wants to be shaped for the AI era.
Business Insider reported that Microsoft plans to cut under 2.5% of its workforce, an announcement possible as soon as next week. Against a base of roughly 228,000 staff, that points to somewhere near 5,700 roles. Reuters could not immediately verify the report, and Microsoft declined to comment.
The arithmetic of repeated cuts
The scale looks modest until it is stacked on what came before. Microsoft had roughly 228,000 full-time staff as of June 30, 2025. In July 2025 it said it would lay off nearly 4% of its workforce, and this new round would land on a company still absorbing that first blow.
The affected roles point to where Microsoft sees less future value. The reductions would hit thousands of positions across sales, consulting and the Xbox gaming division. These are not research or AI engineering jobs, the areas the company is protecting.
Xbox in the crosshairs
Gaming is taking the heaviest scrutiny. Bloomberg reported this month that Xbox is planning major layoffs and deep cuts to marketing and other budgets. The Information went further, saying Microsoft is weighing options for Xbox that include a possible spinoff or a restructuring as a wholly owned subsidiary.
That combination matters. When a division faces budget cuts and a review of its ownership structure at the same time, the message is that its place inside the parent company is no longer settled. Xbox is being asked to justify itself.
A sector-wide retreat
Microsoft is not moving alone. The cuts come amid a broad wave of cost cutting across technology, where the biggest names are trimming headcount even as revenues hold up.
Meta announced plans this year to cut 10% of its workforce. Amazon said it would eliminate roughly 16,000 jobs globally. Set against those numbers, Microsoft's sub-2.5% looks restrained, but the direction of travel is shared.
The pattern across all three is the same. Money is being redirected from established businesses and support functions toward AI infrastructure and the people who build it. Staff in sales, consulting and gaming are learning what that reallocation costs. Microsoft's willingness to cut twice in twelve months suggests the reset is far from finished.
