Microsoft plans to cut thousands of jobs, affecting less than 2.5% of the workforce
Microsoft is preparing to cut about 5,500 jobs in another round of layoffs, as it continues to shift billions of dollars toward artificial intelligence (AI), with the expected move also raising controversy over the company’s use of the H1-B visa program.According to Business Insider, the company could announce layoffs as early as next week. The planned cuts are expected to affect less than 2.5 percent of Microsoft’s global workforce. Based on its headcount of about 228,000 employees as of June 30, that would amount to approximately 5,500 jobs.The cuts are expected to include several business units, including sales, consulting and the Xbox gaming division.
A person familiar with the plans told Business Insider that some affected employees could be offered alternative roles within Microsoft after the announcement.The move follows previous rounds of job cuts. Microsoft laid off about 6,000 employees before announcing another cut of about 9,000 jobs in July 2025, representing nearly 4 percent of its workforce. This round is expected to be smaller after many eligible US employees accepted a voluntary retirement program introduced earlier this year.
The retirement scheme is introduced for employees at level 67 and below who meet the age and service requirements of the company.
Sales employees who are paid on a commission basis were not eligible.Microsoft has traditionally reviewed its workforce at the beginning of a new fiscal year. At the same time, it continued to increase spending on artificial intelligence and cloud infrastructure. The company invested more than $100 billion in AI and cloud projects during fiscal 2026, with most of the spending going toward AI chips and related infrastructure.The Xbox division is also expected to undergo a major restructuring after years of heavy investment in gaming content, hardware and platforms. Earlier this year, Xbox Gaming CEO Asha Sharma told employees that the business needed a “reset.”The expected job cuts have also revived criticism of Microsoft’s continued hiring of foreign workers through the H1-B visa program.A viral post on X claimed that the company has remained among the top six H-1B sponsors in the US since 2020 despite reducing its local workforce.“Microsoft has been the nation’s sixth-largest H-1B applicant since 2020, bringing in foreign workers year after year even as it cuts U.S. jobs. Just months ago, it prompted quiet buyouts for older American employees. About a third of the 9,000 eligible employees exited. This round comes on top of that,” the post read. LinkedIn, which is wholly owned by Microsoft, cut 875 jobs this year, about 5% of its employees, even as revenue grew 12% and continued to decline. Filing H-1B applications.
Xbox takes the biggest hit. Under the “reset” undertaken by new CEO Asha Sharma, the layoffs are said to be the largest layoffs in gaming history. Record profits, and remains one of the largest H-1B sponsors in America. “Thousands of American jobs have disappeared.”Meta announced plans to cut about 10 percent of its workforce this year, while Amazon said it would eliminate about 16,000 jobs globally. Industry data also shows that US technology companies announced more than 123,000 job cuts in 2026, with increased investment in artificial intelligence cited as a primary reason behind many of the cuts.
