Microsoft intends to reduce its workforce by less than 2.5% in a new wave of layoffs.

      Microsoft is reportedly planning to reduce its workforce by under 2.5% in another wave of layoffs, as stated in a Business Insider article published on Tuesday. The announcement regarding these cuts could come as soon as next week, impacting thousands of positions throughout the organization.

      According to the report, the reductions may include personnel in sales and consulting, as well as roles within the Xbox gaming division. Microsoft has not yet responded to requests for comment, and no official confirmation has been made through a filing or company statement.

      The significance lies in the scale; the percentage figure can easily be misinterpreted. This is a reduction of less than 2.5% of the staff, not 25%. Misreading “under 2.5%” as “under 25%” would exaggerate the cuts by a factor of ten, highlighting that the smaller figure is the accurate one based on the reporting.

      As of June 30, 2025, Microsoft had roughly 228,000 full-time employees, meaning a sub-2.5% reduction indicates several thousand positions rather than a large-scale purge. Even on the lower end, the number still amounts to the low thousands.

      This round of layoffs is expected to be lighter than the previous significant one, during which the company announced in July 2025 that it would eliminate nearly 4% of its workforce—one of the largest reductions in recent times.

      The Xbox division is again at the forefront of the situation. This division has previously raised console prices globally due to a worsening crisis in global components and is now preparing for substantial cuts to marketing and other budgets.

      This aligns with a pattern closely monitored in our reporting. Microsoft has been restructuring the unit throughout 2026 and has considered spinning off Xbox entirely as the division's profits have come under strain.

      Instead of closing studios outright, the company has contemplated the possibility of spinning off several, including Compulsion Games, Double Fine, and Ninja Theory, moving towards a more streamlined gaming operation.

      These developments are occurring against the backdrop of ongoing workforce reductions by Microsoft over the past two years, and this trend has not shown signs of slowing down.

      Earlier in 2026, the company introduced its first voluntary retirement offer aimed at a segment of its US workforce, which critics viewed as a buyout disguised as a benefit. It has also eliminated hundreds of roles within Azure in China.

      The overarching context involves substantial financial investment in AI infrastructure, with Microsoft allocating tens of billions to this area while using payroll adjustments as a means to support that expansion.

      More broadly, the tech industry has spent 2026 transforming salaries into capital expenditures for data centers and semiconductor manufacturing. Competitors like Meta have undertaken similar strategies, portraying their cuts as a move towards efficiency while increasing AI investments.

      Microsoft has applied the same rationale in multiple rounds of layoffs this cycle, citing Copilot and AI agents as factors leading to a reduced need for certain job roles.

      What distinguishes this round is the way it is being communicated, or rather the lack of communication. The plan emerged through reporting instead of an official announcement, and the exact number of positions being cut remains unverified by the company.

      While the percentage appears modest compared to the 2025 cuts, the total number of job losses is still significant. Less than 2.5% of 228,000 individuals still represents a considerable number of roles.

      Microsoft has yet to provide a formal figure, a timeline, or a detailed breakdown by division. Until that occurs, the reported numbers should be considered estimates rather than confirmed facts.

      For employees in sales, consulting, and gaming, the uncertainty is challenging. A quiet week in early July could turn out to be anything but that.