Microsoft cuts 4,800 jobs as AI investment reshapes workforce
The latest Microsoft layoffs affect around 2.1% of the company’s global workforce. The move comes as Microsoft focuses more on AI development while trying to manage rising costs linked to large technology investments.
Thousands of jobs affected
Microsoft has confirmed that it will eliminate 4,800 positions as part of a major restructuring plan.
According to reports, the Microsoft layoffs are mainly affecting commercial sales teams and the Xbox gaming division, which is undergoing one of the biggest organisational changes in its history.
The company announced the decision at the beginning of its new fiscal year.
AI investment drives restructuring
The latest Microsoft layoffs come as the company continues investing heavily in artificial intelligence.
Although Microsoft’s Azure cloud platform has benefited from growing AI demand, building AI data centres requires massive spending.
Industry estimates suggest that major technology companies could spend more than $700 billion on AI infrastructure this year, increasing pressure to reduce costs in other areas.
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Tech industry follows a similar path
Microsoft is not the only company reducing its workforce.
Amazon and Meta have also announced thousands of job cuts this year as technology companies shift more resources toward AI projects.
Earlier this year, Microsoft also offered voluntary buyouts to around 9,000 employees in the United States, representing nearly 7% of its US workforce.
Stock performance adds pressure
The restructuring follows a difficult period for Microsoft in the stock market.
Reports show the company’s shares declined by nearly 23% during the first half of 2026, marking its weakest first-half performance since the dot-com crash in 2000.
Analysts say the company is balancing strong AI growth with the high cost of expanding its technology infrastructure.
