Microsoft Cutting Nearly 5,000 Jobs, Most in Xbox Division

Microsoft is cutting nearly 5,000 jobs, and most of those losses are hitting the company's Xbox division. The cuts add up to about 2% of Microsoft's global workforce.

A Microsoft official says the layoffs aren't a result of employees being replaced by artificial intelligence. However, the company says AI has changed the way it does business, and that shift is driving the job cuts.

Some employees were let go right away, while other positions will be phased out over the course of the 2027 fiscal year.

This isn't the company's first round of major cuts. In July 2025, Microsoft laid off about 9,000 employees.