Microsoft plans to implement a new round of layoffs affecting less than 2.5% of its total workforce, as part of efforts to cut costs while continuing to expand investments in artificial intelligence (AI).

According to Business Insider, which cited sources familiar with the matter, the company may announce the layoff round early next week. The decision will affect thousands of employees, including those in sales and consulting, as well as jobs in the Xbox gaming sector.

The move comes at a time when American companies, particularly in the technology, media, and finance sectors, are reducing their workforce to contain expenses while investing heavily in AI infrastructure.

According to Microsoft’s latest disclosure, the company had approximately 228,000 full-time employees as of June 30, 2025.

Earlier media reports indicated that the Xbox unit plans significant job cuts and budget reductions in marketing and other expenses. The company is also considering options for restructuring the unit, including spinning it off as an independent company or reorganizing it as a wholly-owned subsidiary.

In July 2025, Microsoft announced layoffs affecting around 4% of its workforce, one of the largest job cuts the company has implemented in recent years.

This move comes amid a broader wave of layoffs in the tech sector, as Meta announced plans to cut 10% of its workforce, while Amazon revealed plans to lay off around 16,000 employees worldwide, coinciding with increased spending on artificial intelligence technologies.