Microsoft Plans Another Big Round of Layoffs After Cutting 6,000 Jobs

Microsoft, one of the globe’s largest technology companies, is poised to let yet more employees go in the near future. The announcement comes just months after axing more than 6,000 positions back in May 2025. Most of the anticipated layoffs are expected to hit its Xbox division and the firm’s global sales teams. Let’s examine what is happening and explain the reasons behind it.

What Has Already Happened

1. In May 2025, Microsoft dismissed roughly 6,000 employees, accounting for close to 3% of its workforce of 228,000. Such redundancies formed a broad strategy aimed at reducing expenses while channelling more funds into its artificial intelligence (AI) initiatives.
2. Historic layoffs: In the past two years, Microsoft has carried out multiple waves of job redundancies.

• 10,000 jobs in January 2023
• About 1,900 gaming and Activision Blizzard jobs in January 2024
• 650 more Xbox roles in September 2024
• Roughly 1,000 roles in HoloLens and Azure in mid‑2024.

What’s up Next

1. Xbox layoffs next week: Microsoft is set to carry out another sweeping round of cuts in the Xbox gaming division, with recruitment pauses becoming inevitable. Staff reductions exceed the May workforce reductions and will affect teams throughout central Europe and farther afield.
2. Global sales cuts: Come July 2025, Microsoft may eliminate more than 1,000 positions in its worldwide sales team. This move is intended to cut expenses and divert the savings toward departments focused on AI.

What Is Driving Microsoft to Trim Its Employees Once More?

1. a) Large-scale investments in AI

• Microsoft intends to deploy up to $80 billion in 2025 to construct AI data centers and refresh its cloud technology.
• To remain profitable, the company must offset these bold commitments with tighter spending in other areas—for example, reducing its headcount—to stay profitable.

1. b) Reshaping the organization for swifter decision-making

• Microsoft aims to cut back on managers and increase its headcount of engineers. By flattening its hierarchy, the firm hastens decision-making and sharpens each team’s focus.

1. c) Changes tied to performance

• Earlier this year, some positions were eliminated due to reviews. Employees scoring below the set threshold for performance were either dismissed or were presented with voluntary exit schemes.
• Microsoft likewise tweaked its rehiring procedures: employees dismissed for performance reasons are barred from returning to the company for a two-year period.

Who will be impacted?

Xbox Division

• This team comprises Microsoft’s gaming Division. The group has already withstood layoffs in 2023 and 2024. Another wave of layoffs is expected to hit employees engaged in console development and Xbox distribution, particularly their European workforce.

Sales & Marketing Teams

• Given that the sales and marketing division count more than 45,000 people, only a trimming is now in the works. More than one thousand positions could be eliminated as early as July 2025.

Middle managers, as well as non-technical staff

• Microsoft aims to elevate the ratio of engineers relative to managers. Hence, middle managers and non-technical employees are expected to bear a higher share of the layoffs.

According to Microsoft

1. A Microsoft spokesperson indicated that these shifts are geared toward streamlining the organisation so it can most effectively succeed in a dynamic marketplace.
2. The firm underscores that it remains free of financial difficulty. The company’s Azure cloud segment delivered solid results lately, with net income climbing throughout the year.
3. CFO Amy Hood cited the objective of cultivating high-performing teams while trimming management layer to heighten organizational agility.

The Bigger Picture

1. Tech-wide pattern: Other major tech companies such as Amazon, Google, Meta, Intel, and Salesforce have likewise pared down their workforces in 2022.
2. AI-hyped change: The greater companies allocate to AI, the fewer staff they need—largely preferring employees with more advanced technical skills. Several analysts predict that for every $80 billion invested in AI infrastructure, roughly 10,000 jobs would have to be eliminated.
3. Market uncertainty: Wider economic concerns, such as unstable markets or shifting trade rules, are prompting companies to act more cautiously.

Impact on Employees

1. Job loss worries: Layoffs bring big changes. People affected might get severance pay or help finding new jobs, depending on their location and role.
2. Hiring freeze policies: Some employees fired for low performance cannot be rehired at Microsoft for two years.
3. Employee support programs: Those who stay may be encouraged to learn more about AI, engineering, or digital tools through training programs like Microsoft’s efforts in India.

Why It Matters

• Microsoft is not facing any financial strain. The move is aimed at recasting the workforce for a future propelled by AI and efficiency.
• The company aims to move and think even faster, with fewer managers and more contributors—especially engineers.
• Likewise, other tech companies are taking similar action, shifting the importance of technology and AI-related skills to levels never before seen.

Guidance for Students & Young Professionals

1. Learn new skills: Plant your focus on programming, cloud computing, and AI—these domains are surely going to stay highly sought after.
2. Stay flexible: Research shows that most industry sectors face dramatic transformation within the next few years—and the tech field will be among the most turbulent.
3. Prepare for change: Anticipate transformation: even major corporations can pivot at a rapid pace. Create a roadmap for lifelong learning and professional growth in the sphere of technology trends.

Conclusion

Within its latest round of cuts, Microsoft has eliminated more than 6,000 positions, just two months after reducing another 10,000 jobs. This next surge is most notably in Xbox and worldwide revenues to forms a key element in the overarching strategy to invest in AI and promote greater agility. For many employees, this spell challenging times, yet it reflects the course the technology industry is taking. Acquiring AI and engineering capabilities now can have a major impact down the line.