Microsoft is preparing to eliminate thousands of positions, representing less than 2.5% of its global workforce, with an announcement possible as early as next week. The cuts will fall across sales, consulting and the Xbox gaming division, according to a Business Insider report citing people familiar with the plans. The company employed roughly 228,000 full-time staff as of mid-2025, meaning the reduction could affect more than 5,000 roles. Microsoft declined to comment.

The move extends a pattern across the US technology sector, where firms are simultaneously reducing headcount and pouring capital into artificial intelligence. Amazon recorded $2.7 billion in estimated severance costs through 2025, while Oracle and Intel each disclosed $1.8 billion in restructuring expenses, much of it tied to workforce exits. Oracle’s headcount fell by 21,000 between May 2025 and May 2026 as it redirected resources toward cloud and AI products. Intel cut about 15% of its staff—over 25,000 jobs—as part of a turnaround effort. Meta and Amazon have also announced plans this year to eliminate roughly 10% and 16,000 positions respectively.

Within Microsoft, the Xbox unit faces particular pressure. Bloomberg News reported earlier this month that the division was planning major layoffs and marketing budget cuts after raising console prices globally. The Information separately reported that Microsoft is evaluating options for Xbox, including a potential spinoff or restructuring as a wholly owned subsidiary. The upcoming cuts would be the first major restructuring under new gaming CEO Asha Sharma, who took over in February and has called for a “reset” of the business. Microsoft’s last large-scale reduction came in July 2025, when it laid off nearly 4% of staff. Earlier this year, the company introduced its first voluntary retirement programme, which nearly one-third of eligible US employees accepted, generating a $900 million charge.

The layoffs are expected to be announced around the start of Microsoft’s fiscal year on 1 July, though the timing could shift. The company’s shares have fallen about 17% in the past month, reflecting broader investor unease about the cost of AI expansion and its potential to disrupt traditional software revenue. The next factual milestone is the official disclosure of the job cuts, which will clarify the precise scale and distribution of the reductions.