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

      Microsoft is reportedly preparing to reduce its workforce by under 2.5% in another wave of layoffs, according to a Business Insider article released on Tuesday. These job cuts could be announced as early as next week and are expected to impact thousands of positions across the organization.

      The sales and consulting teams, along with roles in the Xbox gaming division, are believed to be included in these reductions. Microsoft has not yet responded to a request for comment, and there has been no official confirmation of the plan through filings or company statements.

      The significance of this figure is crucial, as it can be easily misunderstood. The reduction is of less than 2.5% of employees, not 25%. The potential confusion stems from the decimal point; misreading "under 2.5%" as "under 25%" would exaggerate the cuts by tenfold, making the smaller figure the accurate reflection of the situation.

      As of June 30, 2025, Microsoft had approximately 228,000 full-time employees, meaning a reduction of less than 2.5% translates to a few thousand roles rather than a massive downsizing. Even at the lower end, this figure still amounts to several thousand positions.

      This round of layoffs would also be less severe compared to the last significant cut. In July 2025, Microsoft announced layoffs affecting nearly 4% of its workforce, one of the largest reductions in recent years.

      Once again, Xbox is central to this situation. The division has already increased console prices globally, citing a worsening crisis in global components, and is preparing for substantial cuts to its marketing and other budgets.

      This aligns with the ongoing trends observed in our own reporting. Throughout 2026, Microsoft has been restructuring the Xbox division and has considered the possibility of spinning it off entirely due to pressure on profit margins.

      Instead of closing studios outright, the company has also contemplated selling several of them, including Compulsion Games, Double Fine, and Ninja Theory. The trend points toward a more streamlined gaming operation.

      These cuts do not happen in isolation. Microsoft has repeatedly reduced its workforce over the past two years, and the tempo of these layoffs has remained consistent.

      Earlier in 2026, the firm introduced its first voluntary retirement offer aimed at a portion of its U.S. employees, which critics have labeled a buyout masquerading as a benefit. It has also eliminated hundreds of Azure positions in China.

      The underlying reason for these changes is the flow of money in one direction. Microsoft is investing tens of billions into AI infrastructure, and managing payroll has become one method of financing these investments.

      More broadly, the Big Tech sector has spent 2026 reclassifying salaries as capital expenditures for data centers and chips. Competitors, including Meta, have implemented similar strategies, presenting layoffs as efficiency improvements while increasing AI investments.

      Microsoft has utilized this same reasoning through various rounds of cuts this cycle. The emergence of Copilot and AI agents is increasingly cited as justification for reducing headcount in certain roles.

      What sets this round apart is the manner in which it is being communicated, or rather the lack of communication. The news has come to light through reporting rather than official channels, and the exact numbers remain unverified by the company.

      Although the percentage may seem small compared to the cuts in 2025, the actual number of jobs affected is significant. Less than 2.5% of 228,000 employees still results in a considerable job loss.

      Microsoft has not issued any formal figure, timeline, or breakdown by division. Until then, the figures should be viewed as reported estimates rather than confirmed facts.

      For employees in sales, consulting, and gaming, the uncertainty is the most challenging aspect. A seemingly quiet week in early July could prove to be anything but.