On July 6, 2026, Microsoft revealed plans to lay off approximately 4,800 employees, marking a significant shift in its workforce strategy. The majority of these job cuts will impact the company's Xbox and commercial sales divisions as it adapts to changes in the technology landscape.
Details of the Layoffs at Microsoft
The layoffs will affect around 2.1 percent of Microsoft’s total workforce, with an estimated 1,600 Xbox employees among those impacted. Amy Coleman, the chief people officer, attributed the layoffs to the evolving technology industry and the need for Microsoft to adjust its resources and roles.
“I also want to be direct that the roles eliminated today are not being replaced by AI,” Coleman stated. “At the same time, what is true is that AI is changing how work gets done.” This restructuring comes just a year after Microsoft let go of approximately 9,100 employees.
Impact on the Xbox Division
Microsoft plans to eliminate a total of around 20 percent of Xbox jobs by the end of the financial year. As part of this restructuring, the company is also selling off four Xbox studios and is considering the sale of another studio.
“Decisions like these are never easy,” Coleman added. “We are constantly looking for ways to reduce the need for job eliminations.” Over the past year, Microsoft has redeployed more than 4,000 employees into new roles, signaling an effort to mitigate the impact of layoffs.
Voluntary Retirement Program and Future Plans
In an attempt to avoid layoffs, Microsoft introduced a voluntary retirement program. Employees whose years of service combined with their age totaled 70 or more were eligible, receiving packages that included five years of healthcare coverage and a cash severance payment. More than 30 percent of eligible employees participated in this program.
“While this doesn’t change the difficulty of today’s news, we will continue to do everything we can to create opportunities for our people,” Coleman concluded. Microsoft remains committed to supporting those affected by the layoffs and exploring alternative approaches in the future.
🤖 This article was rewritten by Feed and Figures' editorial AI from a report originally published by The Verge. Facts and quotes are preserved from the original; the rewrite focuses on clarity and structure. For the unedited original, see the source link below.
