Key facts
- Microsoft is planning to cut under 2.5% of its workforce.
- The layoffs will affect thousands of roles, including sales, consulting, and the Xbox gaming division.
- The announcement of the job cuts is expected as early as next week.
- Some employees may be offered new roles within the company.
- This round of layoffs is expected to be smaller than those in the previous year.
Microsoft is reportedly preparing to lay off under 2.5% of its workforce, with announcements potentially expected as early as next week, according to Business Insider, citing sources familiar with the company's plans. The job cuts will impact thousands of roles across various departments, including sales, consulting, and the Xbox gaming segment. Reuters has not been able to immediately confirm the report.
This round of layoffs is expected to be smaller than similar actions taken last year, when Microsoft eliminated 6,000 roles in May and an additional 9,000 employees in July. The company's total workforce is approximately 220,000 people. Some employees affected by the upcoming cuts may be offered new roles within the company.
These plans underscore Microsoft's efforts to control costs as it increases spending on artificial intelligence. The company also faces scrutiny from Wall Street regarding AI's potential impact on software services. Earlier this year, Microsoft offered a voluntary retirement program to eligible US employees, which resulted in about one-third of those eligible accepting the buyout, helping to reduce the percentage of workforce cuts needed compared to the previous year. Sales employees with commission-based compensation were excluded from this retirement offer. Layoffs within the Xbox division have been anticipated following a memo from new gaming CEO Asha Sharma.