Microsoft is all set to trim more than 4,800 jobs across its global workforce. However, the company clarified that the new layoffs are not because of the AI but rather a broader restructuring at the company. This isn’t the first time we are witnessing layoffs at the start of the fiscal quarter, as something similar happened last year as well, where the company removed around 4 per cent of its global workforce. The latest job cuts affect about 2.1 per cent of Microsoft’s employees, with sales and Xbox teams seeing the biggest impact.
Coleman in an internal memo explained that the decision is part of changes in how the company works and where it wants to focus its people, resources, and investments in a rapidly changing technology market. She further acknowledged that job cuts are never easy and said Microsoft is trying to avoid them whenever possible.
According to her, the company is reorganising teams to focus on areas that will deliver the greatest value to customers. Addressing concerns about artificial intelligence (AI), Coleman clarified that the jobs being eliminated are not being replaced by AI. However, she noted that AI is changing the way work is done by automating some routine tasks, making it important for employees to learn new skills as their roles evolve.
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The latest layoffs will mainly affect Microsoft’s Commercial and Xbox divisions, where around 1,600 jobs are being cut immediately in the Xbox business as part of a broader restructuring aimed at strengthening the gaming division for the long term. Aside from that, four Xbox studios also move away from Microsoft and will start their operations independently. These include the Compulsion Games, Double Fine Productions, Ninja Theory and Undead Labs.
While on one hand the company is eliminating jobs, on the other hand, Microsoft is increasing its investment in AI infrastructure while reviewing costs across the company. Coleman said affected employees will receive financial support and other resources to help them move forward. She also pointed out that Microsoft has shifted thousands of employees into new roles over the past year and will continue looking for such opportunities before eliminating positions.
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Coleman added that more changes could take place in other parts of the company as Microsoft continues to reshape its business. According to her, these steps are meant to prepare the company for the future and help it keep pace with changes across the technology industry.
This is not the first time we’re seeing such massive layoffs at the start of the fiscal year. The company have previously followed a similar pattern where they announce layoffs near July 1st. Last year itself the company removed about 4 per cent of its global workforce.