Microsoft gears up for another round of layoffs in latest cost-cutting push

In another round of layoffs, Microsoft is reportedly planning to cut less than 2.5% of its global workforce. Thousands of roles across multiple divisions are expected to be affected, including positions in sales, consulting and the Xbox gaming business, according to a report by Business Insider.

The job cuts are expected to be announced next week, although the timing could still change, according to people familiar with the matter. Some employees whose roles are eliminated may be offered alternative positions within the company.

The scale of the layoffs is expected to be smaller than Microsoft's workforce reductions last year. The company typically implements job cuts around the start of its fiscal year on July 1. In 2025, Microsoft carried out two major rounds of layoffs, eliminating around 6,000 jobs in May and another 9,000 in July.

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The July 2025 layoffs represented about 4% of Microsoft's global workforce at the time.

The latest round of job cuts comes as Microsoft continues to rein in operating costs despite posting strong financial results. For the quarter ended March 31, 2026, the company reported double-digit growth in revenue, operating income and net income, driven by continued strength in its cloud and AI businesses.

Microsoft's Cloud division remained a key growth driver, while its AI business reached an annual revenue run rate of $37 billion—more than double the level recorded a year earlier. The company also reported strong growth in Microsoft 365 Commercial products and cloud services.

Meanwhile, Microsoft continues to face regulatory scrutiny. In May 2026, the UK's Competition and Markets Authority (CMA) launched an investigation into the company's business software ecosystem to assess whether its market position, including practices such as product bundling and interoperability, is harming competition and limiting customer choice.