Announcement
Microsoft is set to announce a new round of job cuts next week, according to Business Insider citing people familiar with the matter.
Scope of Layoffs
The cuts will affect thousands of roles across the company, including positions in the sales and consulting units as well as the Xbox gaming division. The total number of jobs to be eliminated will be less than 2.5% of Microsoft’s current workforce of approximately 220,000 employees.
Comparison with Prior Reductions
The planned reductions are described as smaller than the layoffs undertaken last year, indicating a more modest scale of workforce trimming.
Strategic Rationale
The layoffs are part of Microsoft’s ongoing effort to curb expenses and reallocate a larger share of its spending toward artificial‑intelligence initiatives, a shift that has been ongoing for the past three years.
Market Reaction
Following the news, Microsoft’s shares rose 3% in Wednesday trading, moving higher after having touched a 52‑week low of $349.20 the previous week and posting a modest rebound since Friday.
Additional Context
Bloomberg earlier reported that the Xbox division is also planning a significant reduction in both workforce and marketing spend.