Microsoft cuts another 4,800 jobs, including many in Xbox division

July 7, 2026 - 00:57

Microsoft is laying off another 4,800 employees, marking the second major round of job cuts this year. The reductions will shrink the company's overall workforce by more than 2%, and the impact is hitting several key divisions, including the Xbox gaming unit, sales departments, and consulting teams.

The cuts come as Microsoft continues to restructure after its massive $69 billion acquisition of Activision Blizzard. While the company has been integrating the gaming giant, it is also trimming overlapping roles and shifting priorities. The Xbox division, in particular, is seeing significant reductions, though Microsoft has not detailed exactly which teams or projects are affected.

Beyond gaming, the layoffs are sweeping through sales and consulting roles. These areas have been under pressure as Microsoft pushes harder into cloud services and AI products, which require different sales strategies and technical expertise. The company has been reallocating resources toward artificial intelligence, especially its Copilot tools and Azure cloud platform, while scaling back in more traditional software and hardware segments.

This is not the first round of cuts for Microsoft in 2024. Earlier this year, the company laid off around 1,900 employees, mostly from its gaming division. Combined with this latest wave, the company has cut more than 6,700 jobs since January. Microsoft currently employs roughly 228,000 people worldwide.

The tech industry as a whole has been in a prolonged period of belt-tightening. Many major firms, including Google, Amazon, and Meta, have trimmed their workforces over the past two years, citing over-hiring during the pandemic and a need to focus on efficiency and AI investments. Microsoft's latest move fits that pattern, as the company tries to balance growth in new areas with cost discipline in older ones.

For now, affected employees will receive severance packages and career transition support, according to internal communications. Microsoft has not commented on whether further cuts are expected later this year.