
Microsoft Cuts 4,800 Jobs as AI Spending Reshapes Xbox and Cloud Strategy
Microsoft is eliminating roughly 4,800 jobs, about 2.1% of its global workforce, in a restructuring announced Monday that concentrates the deepest cuts in its Xbox gaming unit while the company redirects cash toward artificial intelligence infrastructure. The reductions land as investors press Big Tech to show returns on record AI spending. Key Takeaways Microsoft confirmed approximately 4,800 job cuts on July 6, 2026, representing about 2.1% of its workforce. The Xbox gaming division absorbs the heaviest impact, with about 1,600 roles eliminated immediately and reductions of roughly 3,200 planned across fiscal year 2027. Microsoft shares fell nearly 23% in the first half of 2026, the company’s worst first-half stock performance since 2022. The cuts follow voluntary buyouts offered earlier this year to about 7% of the company’s U.S. workforce, or roughly 9,000 employees. What Prompted Microsoft’s Latest Round of Layoffs Microsoft framed the decision as part of a continued rebalancing of resources toward high-margin AI and cloud services. The company is cutting the positions as it spends heavily on AI infrastructure and uses the technology to improve efficiency across its business. The move follows a difficult stretch for the stock. Microsoft announced the cuts on Monday after its shares fell













































