Microsoft could be preparing for another round of job cuts, according to a new report from an insider. However, the company has not officially confirmed the layoffs. The reported cuts would affect less than 2.5% of Microsoft’s workforce. The company currently employs around 228,000 people, so the move could still impact thousands of workers.
This would follow Microsoft’s previous layoffs in July 2025. At that time, the company reduced its workforce by around 4%.
According to the report, the upcoming layoffs will affect several departments. However, the sales and consulting teams are expected to face the biggest impact. Microsoft’s Xbox division is also reportedly among the most affected.
The reported changes have raised concerns about the Xbox business. Microsoft has already increased Xbox console prices three times within a year. The company said rising component costs were behind those price hikes.
As a result, some industry observers believe the reported layoffs could point to broader challenges inside the Xbox division. However, Microsoft has not commented on those claims.
Meanwhile, the reported move matches a wider trend across the technology industry. Many major companies are shifting more money from employee costs to AI infrastructure. They are investing heavily in AI data centers and advanced chips instead.
Microsoft has also repeatedly said that Copilot and AI agents can automate certain tasks. Because of that, the company believes some job roles are becoming less necessary. For now, the reported layoffs remain based on insider information. Microsoft has yet to release an official statement about the reported workforce reduction.
