Microsoft, the giant from Redmond, is once again stirring up offices. The company is preparing to lay off just under 2.5% of its global workforce, meaning it could see several thousand people leave. While the market has grown accustomed to cuts in Big Tech, this wave stirs huge emotions because it directly hits the beloved Xbox arm and the sales and consulting departments. The corporation ruthlessly trims costs to fund a massive AI revolution.
When Satya Nadella channels billions into AI infrastructure, savings must appear somewhere.
Digital clean‑up in the shadow of algorithms
According to media reports that may receive official confirmation next week, the new wave of layoffs will affect positions inconsulting departments, sales and the Xbox gaming division.
According to data from last year’s SEC report as of June 30, 2025, the company employed about 228,000 full‑time employees. A reduction of just under 2.5% means a ruthless goodbye to more than 5,000 specialists across the company’s sectors.
Interestingly, the scale of current cuts could be much larger if not for the voluntary exit program launched at the beginning of 2026 for senior U.S. employees, which about one third of eligible people used. Microsoft refused an official comment on the latest reports, but the market reacts nervously.
A similar situation occurred at the Kraków branch of HSBC, where employees’ duties were delegated to another country. Though this time it’s different, the scale of mass layoffs is becoming truly devastating.
We wrote more about this in the article: Giant will lay off hundreds of Polish employees. Their duties will be delegated to India
Microsoft shares closed the last sessions down 19% for the month, approaching the worrying level of the 52‑week low.
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Wall Street is now loudly asking when massive AI spending will start delivering real, tangible returns for shareholders who are increasingly cautious about the enthusiasm around digital assistants.
U.S. tech giants constantly seek a balance between innovation and operational profitability, which directly translates into employment stability.
Chart. Microsoft stock price
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Source: TradingView.
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See also: Nvidia and Alphabet shares react to the giants’ launch. One may fall behind
Red death ring over Xbox brand
The loudest echoes of this restructuring, however, resonate in the gaming world. Xbox, which recently challenged competitors with spectacular studio acquisitions, now faces a wall itself.
Under the leadership of new managing director Ashy Sharmy, the brand is undergoing a painful and abrupt “reset.”
Internal notes reveal a drastic drop in profitability margin to just 3%, and the gigantic spend of over 20 billion USD on content, platform development and subsidizing hardware in recent years simply did not translate into expected revenue growth.
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Bloomberg reports that the gaming division plans drastic cuts to marketing budgets and mass layoffs. Importantly, this is already happening, as evidenced by the closure of Ninja Theory, which a week earlier had presented the upcoming (but likely already cancelled) game Senua.
The black scenario even includes immediate cut‑off of external project funding and cancellation of key games. But that’s not all.
The service The Information points out that the corporate board has radical strategic options: from deep restructuring of structures to a complete spin‑off of the Xbox division as a standalone subsidiary.
Consumers already feel the component crisis in their wallets, paying significantly more for consoles worldwide, and upcoming staff cuts could permanently shift the balance of power in the video‑game market.
See also: Will the market collapse due to the gaming sector? The giant warns! Its shares are taking an unprecedented direction
Silicon Valley in survival mode
The decisions of the Redmond board fit into a broader, deeply concerning trend in the U.S. tech, media and financial markets.
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While last year’s layoffs at Microsoft in July 2025 covered almost 4% of the global workforce (about 9,000 people, after an earlier layoff of 6,000 in May), the current wave hits the weary industry hard.
Stock market competitors are also not idle in reducing headcount, trying at all costs to satisfy demanding investors. In the same year, Meta announced plans to cut another 10% of its employees, and Amazon consistently implements a global plan to eliminate about 16,000 jobs worldwide.
See also: Shares of the giant fell 55%. A nostalgic pirate breeze will help the failing company?
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