Microsoft to lay off 5,500 employees as it continues to spend billions on AI
More Microsoft jobs are on the line, with the tech giant expected to announce yet another wave of layoffs next week.
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Microsoft should announce more layoffs next week, affecting mainly sales and consulting roles.
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Fewer than 5,500 employees are expected to be affected, including some previously expected Xbox division cuts.
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The cuts follow earlier 2025 layoffs, including 6,000 Microsoft jobs and nearly 300 LinkedIn employees.
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Microsoft is cutting costs while investing heavily in AI, despite developer complaints and reported OpenClaw security flaws.
Microsoft is set to announce a new round of layoffs that will reportedly affect thousands of employees.
These cuts will predominantly affect employees working in sales positions and consulting roles, according to Business Insider.
Sources familiar with the matter told journalists that this wave will affect a smaller number of people, with fewer than 2.5% of Microsoft’s 220,000 global workforce likely to be impacted in comparison to last year's layoffs.
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Fewer than 5,500 people are likely to be laid off, and this number is expected to include previously anticipated layoffs within Microsoft’s Xbox gaming division.
The new wave of layoffs should be announced next week, and while some employees will walk away from the company, others will be immediately offered new roles.
The tech giant announced that 6,000 employees would be out of work (3%) in 2025, marking the largest round of layoffs since 2023, when Microsoft let go of 10,000 people.
A month later, Microsoft quietly fired nearly 300 employees working for LinkedIn, the product it acquired in 2016, along with over 300 employees from other departments.
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These layoffs are largely a result of Microsoft’s focus on AI, with the company cutting costs to invest in the technology.
Microsoft has reportedly invested $190 billion in AI since 2025, and has pledged billions of dollars to build new data centers, of which it operates roughly 300 across 34 countries.
Since then, Microsoft has debuted new AI tools such as Scout, the AI agent powered by the open-source platform OpenClaw.
However, Microsoft’s triumph was quickly stifled when researchers uncovered 5 zero-day vulnerabilities in OpenClaw, just before the company planned expansion of the open-source platform.
At the same time, Microsoft announced a new suite of homegrown AI models, including a coding model designed to strengthen its GitHub Copilot tool.
But developers weren’t pleased with the tools after Microsoft implemented a meter-based system for its $39 monthly Copilot Pro+ plan.
Developers complained that they were burning through 8% of their monthly tokens in two hours.
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