Microsoft severing employment for approximately 9,000 workers in recent job reduction efforts
Microsoft, the multinational technology company, has recently announced a new round of layoffs that will impact approximately 9,000 employees globally. This represents nearly 4% of its workforce as of last year.
This is the company's second major workforce reduction in 2025 and continues a broader trend of cost-cutting and restructuring efforts within the company. The layoffs will impact multiple teams worldwide, notably including the sales division and the Xbox gaming business.
Within the gaming division, about 10% of staff at the Stockholm-based King division (known for Candy Crush) were cut, and other gaming offices in Europe and the US have also been affected. This marks the fourth round of cuts at Xbox in the past 18 months, following prior layoffs and studio closures linked to Microsoft’s acquisition of Activision Blizzard in 2023.
Phil Spencer, CEO of Microsoft Gaming, emphasised the need to prioritise the strongest opportunities despite current strong performance and increased gaming engagement. He explained the importance of making tough decisions now for future sustained success and maintaining discipline in resource allocation.
Despite these workforce reductions, Microsoft continues to report strong profits, including over $25 billion in net income in its last quarterly report. The layoffs are strategic moves to optimise the company's structure rather than a consequence of financial decline.
This restructuring is part of Microsoft's ongoing efforts to better position the company for success in a dynamic marketplace. The company underlines the need for discipline and focus to remain competitive and successful in the dynamic tech and gaming industries.
In addition to Microsoft, other software providers such as Autodesk, Chegg, and CrowdStrike have also slimmed down this year. The tech industry has been hit hard by economic uncertainties and the need to adapt to rapidly changing market conditions.
In summary, Microsoft’s layoffs in 2026 are part of intentional restructuring and cost management to prioritise key business areas and sustain long-term growth amid evolving market conditions and competitive pressures. The company underlines the need for discipline and focus to remain competitive and successful in the dynamic tech and gaming industries.
[1] Microsoft Press Release, 2026 [2] Microsoft Earnings Call Transcript, 2026 [3] Microsoft Annual Report, 2025 [4] Microsoft Blog Post, 2026
1) The restructuring efforts within Microsoft, as exemplified by the recent layoffs affecting 9,000 employees, are aimed at optimizing the company's structure to prioritize key business areas and ensure long-term growth in the dynamic tech and gaming industries.
2) The strategic moves, including layoffs and adjustments in the trading of various divisions like sales and the Xbox gaming business, are not a direct consequence of financial decline, as Microsoft continues to report strong profits, with over $25 billion in net income in its last quarterly report.
3) Throughout 2026, Microsoft has been joined by other software providers such as Autodesk, Chegg, and CrowdStrike in adopting cost-cutting and restructuring strategies amid the economic uncertainties and rapidly changing market conditions impacting the broader tech industry.
