Microsoft is likely to announce fresh round of job cuts soon as the company aims to control costs, according to report by Business Insider citing people familiar with the situation.
The layoffs are expected to impact thousands of jobs such as sales and consulting, along with roles at the Xbox gaming division, the report said. The latest round is likely to be smaller than similar layoffs last year. The job cuts are estimated to be less than 2.5% of the company's 220,000-person workforce.
Microsoft is planning to announce job cuts by next week, however the timing may change. Notably, some impacted employees will be given new roles immediately. The tech giant had previously cut jobs around the beginning of its new fiscal year on July 1.
In 2025, Microsoft slashed 6,000 roles in May and an additional 9,000 employees, or about 4% of the company's workforce, in July.
The job cut plan highlights Microsoft's efforts to rein in costs as it ramps up spending on AI, teh report said. It is also facing pressure from Wall Street over concern that AI could replace software services, including, in theory, some Microsoft offerings. The stock has tanked about 17% in last month.
Apart from layoffs, Microsoft announced a voluntary retirement program, earlier this year, offering buyouts to employees level 67 and below in the US who had 70 or more years of age and service. Nearly, 7% of its 125,000 US workforce, or nearly 9,000 employees were eligible for the buyout.
Around one-third of eligible employees opted for the buyout, in line with expectations, the report said. This permitted Microsoft to reduce a lower percentage of its workforce compared to last year, it added.
Sales employees with commission-based compensation were excluded from this retirement buyout offer, the report said, citing internal documents. Meanwhile, layoffs in the Xbox vertical was expected after new gaming CEO Asha Sharma sent a memo to employees calling for a "reset" of the business.
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