Microsoft: The world’s leading tech company Microsoft has once again announced large-scale layoffs of employees. The company has decided to lay off about 4,800 employees, or about 2.1% of its total global workforce. However, this time the biggest question was whether this layoff was due to Artificial Intelligence (AI)? On this, Microsoft has clearly said that AI is not replacing the positions which have been eliminated. According to the company, this decision has been taken to make the business more effective and to prepare the organization according to future needs.
Microsoft said that this layoff is not due to any AI automation but is part of a large-scale restructuring of the company. The company aims to simplify its operations and align different business units with future needs. The company also said that thousands of employees have been transferred to new roles in the last one year so that as many people’s jobs as possible can be saved.
Voluntary retirement planning got good response
According to Microsoft, more than 30% of eligible employees participated in the recently launched voluntary retirement program. Apart from this, the company had earlier also offered voluntary buyout to about 7% of its employees in America.
Billions of dollars invested in AI, cost pressure increases
Microsoft has invested heavily in AI and cloud infrastructure in recent years. The company plans to spend about $190 billion on data center and AI infrastructure in fiscal year 2026. Due to increasing investment, the pressure on the company to reduce costs and make the business more profitable has also increased. Although Azure cloud business is benefiting from the increasing demand for AI services, the company is making several changes to balance its expenses.
Biggest impact on Xbox division
This layoff has had the biggest impact on Microsoft’s Xbox gaming business. According to the report, about 20% of the staff in the Xbox division will be cut. About 1,600 employees will be laid off immediately, while about 1,250 more positions will be eliminated over the next year. Apart from this, the number of employees in Activision Blizzard, ZeniMax Media and Xbox platform teams will also be reduced. The company will restructure some game studios, while some studios may be sold to new owners.
There is pressure on shares also
Microsoft shares have also seen weakness this year. The company’s shares have fallen by about 23% in the first half of 2026, which is considered to be the weakest performance after 2022.
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