Microsoft Slashes Jobs Yet Again

Microsoft is trimming its workforce again, cutting about 4,800 jobs as its new fiscal year kicks off. The reductions amount to roughly 2.1% of staff and fall largely on the company's commercial sales arm and its Xbox gaming unit, according to an internal memo viewed by the Verge. Chief people officer Amy Coleman told employees the cuts stem from shifts in the tech sector and the need to realign operations amid the rise of AI—while stressing that the eliminated roles "are not being replaced by AI," even as AI reshapes how work is done. Reuters notes that with Big Tech set to plow some $700 billion into AI this year, the pressure is on to see some returns.

Roughly 1,600 Xbox workers are being let go now, with plans to ultimately reduce about 20% of Xbox jobs by year's end, part of a broader effort to "reset" a division that has long struggled. Microsoft is also selling four Xbox game studios and may sell another. Coleman said the company has moved more than 4,000 employees into new roles over the past year and highlighted a voluntary retirement program, which more than 30% of eligible US employees accepted. She said Microsoft would keep looking for ways to limit future layoffs and "responsibly support those affected."