Microsoft plans another round of layoffs, may cut less than 2.5% of workforce: Report

Microsoft is planning to reduce its workforce by less than 2.5% in its latest round of layoffs, Reuters reported, citing a Business Insider coverage published on Tuesday. The report, citing people familiar with the matter, said the company could announce the job cuts as early as next week. Reuters could not independently verify the report.

The planned layoffs are expected to affect thousands of employees across different teams. Roles in the sales and consulting divisions are likely to be affected, as are positions in Microsoft's Xbox gaming business.

Here are key details you should know about this reported layoff.

Thousands of employees could be affected

As of 30 June, Microsoft had around 228,000 full-time employees worldwide, according to the company's filing with the US Securities and Exchange Commission (SEC), Reuters reported.

A workforce reduction of under 2.5% would still result in thousands of employees losing their jobs. The report said multiple business units are expected to be included in the latest round of layoffs, although the exact number of affected employees has not been disclosed.

Xbox division also expected to see job cuts

Microsoft's Xbox gaming business is also expected to be part of the latest layoffs, according to the Reuters report.

Earlier this month, it was reported that Xbox was preparing for significant job cuts, along with reductions in marketing and other budgets. The report came after Microsoft raised prices on Xbox gaming consoles in several markets, citing rising costs tied to global component shortages.

It was also reported in June that Microsoft was evaluating different options for its gaming business. These reportedly include restructuring Xbox as a wholly owned subsidiary or exploring a potential spinoff. Microsoft has not publicly confirmed these plans.

Follows major layoffs announced last year

The latest reported layoffs would follow Microsoft's announcement of one of its largest workforce reductions in recent years.

In July 2025, the company said it would cut nearly 4% of its global workforce. The move was part of broader efforts to reorganise parts of the business while continuing investments in key areas.

Microsoft has carried out multiple rounds of layoffs in recent years.

Tech companies continue to reduce workforce

Microsoft is not the only technology company reducing headcount. Several major firms across the technology sector have announced layoffs this year as they balance cost management with continued investments in artificial intelligence.

Meta announced earlier this year that it plans to reduce its workforce by about 10%. Amazon has also announced plans to eliminate roughly 16,000 jobs globally.

“U.S. companies have continued to trim headcount in recent months, ​with a fresh wave of layoffs across the technology, ​media and finance sectors as firms rein in costs, ⁠while investing heavily in AI infrastructure,” Reuters mentioned.