Microsoft reduces workforce by 4,800, impacting Xbox and commercial sales divisions

Jul 6, 2026

AI Summary

Microsoft has laid off approximately 4,800 employees, representing 2.1% of its global workforce, primarily affecting its Xbox and commercial sales sectors. The company emphasizes that these layoffs are not directly due to AI replacement, but rather a response to changing business needs and the evolving technology landscape.

Microsoft has cut around 4,800 jobs, which is 2.1% of its total workforce, as part of ongoing layoffs.
The layoffs primarily impact the Xbox and commercial sales divisions, according to an internal memo from Amy Coleman, EVP and chief people officer.
Coleman stated that the business is adapting to changes in technology and customer needs, necessitating adjustments in resources and roles.
While Coleman noted that the eliminated roles are not being replaced by AI, she acknowledged that AI is changing how work is performed.
Microsoft recently launched its Frontier Company business unit, focusing on enterprise AI deployments, supported by a $2.5 billion investment.
The layoffs coincide with a trend in the tech industry, where approximately 154,000 jobs have been lost in the first half of 2026 across major companies.
Microsoft previously offered voluntary buyouts to around 5,500 employees and laid off about 15,000 workers in the previous year.
The company is also working on reskilling and redeploying employees, having moved over 4,000 into new roles in the past year.

layoffsjob displacementartificial intelligenceworkforcemicrosoft

Microsoft reduces workforce by 4,800, impacting Xbox and commercial sales divisions

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