Microsoft Prepares New Workforce Reduction—Thousands of Employees to Be Laid Off

Microsoft is preparing for a new round of layoffs — the company plans to cut less than 2.5% of its workforce, Business Insider reported in July 2026, citing sources; The Next Web also confirmed the information.

Who Will Be Affected by the Layoffs

According to sources, an official announcement could come as early as the following week after the Business Insider report is published. Although 2.5% seems modest, given Microsoft's workforce which numbers in the hundreds of thousands, it means thousands of jobs. The first groups to face cuts are sales and consulting departments, but other divisions may also be affected.

• Less than 2.5% of Microsoft's workforce will face cuts
• This translates to thousands of jobs, despite the small percentage
• Sales and consulting departments are at risk
• An official announcement is expected within a week after Business Insider's report

Not the First Round of Layoffs

Microsoft has regularly reduced its workforce over the past several years as part of a reassessment of priorities and redistribution of budgets within the company. Back in January 2023, the company announced the layoff of approximately 10,000 employees — one of the largest layoffs in Microsoft's history — and since then has conducted targeted layoff rounds in individual divisions, including the gaming division following the purchase of Activision Blizzard. The new round continues this series: the company periodically reviews team sizes that don't directly impact product development.

Why Major Tech Companies Cut Workforce

A wave of similar layoffs in recent years has affected nearly the entire major technology industry — not just Microsoft, but other major market players, who simultaneously are increasing multi-billion dollar investments in data centers, cloud capacity, and AI infrastructure. Companies explain such decisions by a desire to simplify management structure and reduce the number of intermediate layers between product development and the customer, redirecting freed-up budgets to more capital-intensive expense categories.

What Is Known About Official Response

At the time of Business Insider's report publication, the company had not officially commented on layoff plans — according to sources, an announcement could come within a week. This practice is typical for large corporations: details of layoff rounds are usually kept secret until internal announcement to employees to avoid premature leaks and panic within the workforce.

What This Means

For major technology companies like Microsoft, it has become standard practice to cut traditional functions — sales, consulting, administrative roles — in parallel with increasing investments in data centers and cloud infrastructure. Even a relatively small percentage cut at a company of Microsoft's scale means a significant number of lost jobs and signals that workforce restructuring continues.