Microsoft reportedly weighs another round of layoffs that could reach about 5,000 employees

Microsoft is reportedly preparing for another wave of layoffs that could affect thousands of employees as it reallocates resources toward artificial intelligence initiatives, according to a recent report in Fox Business citing prior coverage.

The report characterizes the potential reductions as a workforce trimming of about 2.5%, which would translate to roughly 5,700 job cuts based on Microsoft’s latest disclosed global headcount. Microsoft is described as aiming to implement the changes as early as next week.

If the estimate holds, the cuts would reportedly be concentrated in functions including sales and consulting, along with work tied to Xbox. Microsoft has in past years emphasized that its Xbox business is a key platform for gaming content and services, but the report does not specify which roles or teams would be impacted first.

The same report frames the layoffs as part of a broader restructuring trend in the technology sector, where companies are trying to manage costs while increasing spending on AI-related products, infrastructure and research. It also notes that the latest potential cuts would follow earlier reductions at Microsoft.

Last summer, Microsoft laid off roughly 4% of its workforce, about 9,000 employees, in one of its largest rounds of job cuts in recent years. The new report suggests Microsoft could be continuing that cost-control approach rather than pausing it.

Fox Business also points to market sensitivity around the long-term implications of AI. The report says investor concerns have risen as analysts warn that AI could eventually replace certain categories of software services, which may include some offerings from Microsoft. The company did not provide additional details in the post, including whether any affected functions would be shifted to new product areas or whether the company’s AI strategy is driving specific role eliminations.

Separately, the reporting notes that Microsoft’s most recent annual filing with the U.S. Securities and Exchange Commission lists employment of about 228,000 full-time workers worldwide as of June 30, 2025. Using that figure, a 2.5% reduction aligns with the report’s order-of-magnitude estimate for how many jobs could be cut.

Microsoft did not disclose the potential cuts in the cited post beyond the reported planning and estimates, and the report did not provide information on severance terms, timing beyond “as early as next week,” or whether employees would be offered alternative roles as part of the transition. For now, investors and employees are left to wait for confirmation from Microsoft or for details that typically accompany restructuring announcements.