Microsoft to Cut Thousands More Jobs Across Sales, Xbox and Other Divisions
Claire Weston
Microsoft plans to cut several thousand jobs spanning sales, consulting, and Xbox gaming — capped at roughly 2.5% of its 220,000-strong workforce. This means → even as it pours capital into AI, the company is systematically trimming headcount in non-core functions.
Which teams are affected, and how deep?
The cuts hit sales, consulting, and Xbox gaming, totaling several thousand roles.
The scale is smaller than last year and will not exceed 2.5% of Microsoft's 220,000 employees — roughly 5,500 people at most.
Some affected staff will immediately be offered new internal positions. This means → not everyone leaves outright; internal redeployment is part of the cushion.
Why is this round smaller than last year's?
Earlier this year Microsoft launched a voluntary retirement buyout — eligible long-tenured U.S. employees could take a payout and leave.
Of roughly 125,000 U.S. staff, about 7% (nearly 9,000) qualified; roughly one-third accepted the deal.
In plain terms = a "pay them to leave" round already thinned the ranks, so the forced-layoff share this time could stay below last year's level.
Commission-based sales staff were excluded from the buyout, however, and bear the brunt of this round.
Was the Xbox shakeup telegraphed?
New gaming-unit CEO Asha Sharma had already sent a staff memo calling for a "reset" of the Xbox business.
This reflects a deliberate, post-leadership-change restructuring — not a snap decision.
What is the bigger picture?
Microsoft is ramping AI spending while compressing legacy headcount — the layoffs are a direct expression of that strategic tilt.
Over the past month the stock has fallen roughly 17%.
This means → Wall Street's real worry is not the layoffs themselves but whether AI will cannibalize parts of the software-services market — including Microsoft's own products. That question remains unresolved and continues to weigh on the valuation.
Content is for reference only, not financial advice.