Microsoft plans another round of job cuts, impacting thousands of roles

In a strategic move to tighten its budget, Microsoft is set to announce job reductions impacting thousands of positions across various sectors, including sales, consulting, and the Xbox gaming division. Sources familiar with the matter revealed that this latest round of layoffs will be smaller compared to previous ones, affecting less than 2.5% of the company's total workforce of 220,000 employees. The announcement regarding these layoffs is anticipated next week, although the timing remains subject to change. Some employees who are affected may be offered new roles immediately, indicating a potential reallocation of talent within the company. Historically, Microsoft has often executed job cuts around the commencement of its fiscal year on July 1. Last year, the company undertook significant layoffs, eliminating 6,000 positions in May and an additional 9,000 in July, which constituted about 4% of its workforce. This recent decision reflects Microsoft’s ongoing strategy to manage costs while simultaneously increasing its investment in artificial intelligence. The tech giant has been facing mounting pressures from investors concerned that advancements in AI could threaten the relevance of traditional software services, including some of its own offerings. This scrutiny has contributed to a 17% drop in Microsoft’s stock price over the past month. Earlier this year, Microsoft introduced a voluntary retirement program aimed at employees aged 70 or older, offering buyouts to those in levels 67 and below within its U.S. workforce. Approximately 7% of its 125,000 U.S. employees were eligible, with about one-third opting for the buyout, aligning with the company’s expectations. Sales personnel who earn commission-based compensation were notably excluded from this retirement offer, according to internal documents. With new leadership in the Xbox division, including CEO Asha Sharma, there have been anticipations of layoffs as part of a broader business 'reset'.