Reported by NUPIAO | Written by Song Jianan
On July 1st, sources close to the situation told NUPIAO that Microsoft, the tech behemoth with a global workforce of 220,000, is gearing up for yet another round of job cuts. This time around, they’re looking to trim thousands of roles across sales, enterprise consulting, and even the Xbox gaming division. The numbers? We’re talking about a cut rate likely staying under 2.5% of their total staff—roughly 5,500 people. While still significant, it’s actually a bit more measured than the two massive waves we saw last year.
One insider hinted that the official announcement could drop as early as next week, though timing might shift. Interestingly, some folks affected won’t just be shown the door; a portion of them are already being quietly reassigned to new roles within the company.
The signs were there all along. Just earlier this month, Xbox’s new CEO, Ash Sharma, and Head of Content, Matt Booty, dropped an internal memo marking their first 100 days in charge. It was pretty clear: they acknowledged that Xbox had stretched too thin trying to compete in a market flooded with content. They admitted that after pumping over $89 billion into investments and studio support over the last five years, their game revenue actually dipped by nearly $500 million during that same period. Their verdict? “We can’t let this continue.”
In reality, Microsoft hasn’t stopped trimming the fat. Back in May last year, they announced cutting 6,000 jobs globally—about 3% of their workforce at the time. That hit mostly mid-level management and non-tech roles like sales, marketing, and recruiting across various departments, including subsidiaries like LinkedIn and Xbox. Redmond, Washington (home base) took the biggest hit with around 1,985 cuts.
But wait, just two months later, they threw another curveball with a plan to eliminate roughly 9,000 more positions. A spokesperson clarified then that this wasn’t hitting more than 4% of their global headcount, impacting everyone from different regions to all levels of experience.
Why the sudden shakeup? Microsoft claimed it was all about streamlining operations, flattening the hierarchy, and staying sharp in a chaotic market. “We will keep pushing necessary organizational changes to ensure our teams stay competitive and successful,” a spokesperson stated at the time.
This isn’t the first time rumors have swirled this year. Back in May, Dan Shapero, the CEO of Microsoft’s LinkedIn, sent out a note saying the professional network needed to deliver more value and boost profitability. The cuts would ripple through engineering, product, and marketing teams. Rumors suggested a 5% cut, which would mean thousands of jobs gone from LinkedIn’s 17,500-strong team.
Add this latest wave to the previous ones, and since May 2025, Microsoft has been chipping away at its workforce, bringing the total number of eliminated or optimized roles dangerously close to the 20,000 mark.
Here’s something interesting to note: In April, Microsoft rolled out a voluntary buyout program. Employees at level 67 and below, who combined their age and tenure to hit 70 years, could cash out and leave. High-level execs and those on sales incentives were excluded. By June 2025, out of the 125,000 employees in the US, about 8,750 were eligible. Many see this as a much gentler, more dignified form of “soft layoff.”
So why the relentless downsizing? It comes down to one thing: the massive strategic shift toward AI. Microsoft executives have been screaming from the rooftops about how crucial AI is. Satya Nadella, the CEO, mentioned in July 2025 that 20% to 30% of their code is now auto-generated by AI tools. Even more wild? Chief Technology Officer Kevin Scott predicts that by 2030, 95% of all code will be written by AI.
The cost of building this AI empire is squeezing hard. Microsoft spent a staggering $88 billion on AI and computing infrastructure in fiscal year 2025, with plans to keep spending high in 2026. Amy Hood, the CFO, made it clear in earnings calls: operating expenses will grow only slightly, but employee headcount will drop. She emphasized this is all about efficiency, agility, and moving faster in a dynamic world.
Microsoft isn’t alone in this. Across the board, top tech giants in 2026 are slashing their workforces to adapt. Reports say Meta planned to fire 10% of its global staff back in late May, with deeper cuts expected later in the year.
In what’s being called a “total AI transformation,” Meta isn’t just firing people; they’re moving up to 7,000 workers into new AI-focused projects. When you combine the layoffs and transfers, this restructuring affects about 20% of Meta’s entire workforce. Plus, they’ve already frozen hiring for another 6,000 open roles.
Then there’s Oracle. Last fiscal year, they cut about 21,000 jobs—more than previously reported—including roles made obsolete by AI adoption. In their financial filings, they bluntly stated, “Adopting and deploying AI technologies has led, and will continue to lead, to a reduction in our workforce.” By May 31, their full-time global headcount dropped from 162,000 to 141,000, costing them around $1.8 billion in restructuring fees.
The bigger picture is stark. On June 4th, Challenger, Gray & Christmas, a major US employment consultancy, released a report showing that the tech sector alone announced plans to cut 38,242 jobs last month—the highest number since August 2024. Year-to-date, tech companies have declared cuts for 123,653 workers, a jump of over 65% compared to the same time last year.
“The labor market is being reshaped in real-time by technology,” said Andy Chalenger, the firm’s Chief Revenue Officer. “Now, AI is the primary reason cited when companies decide to let people go.”
