Microsoft is planning to announce job cuts soon as the tech giant continues efforts to control costs, according to people familiar with the situation.
The cuts are expected to impact thousands of roles, including sales and consulting, in addition to jobs at the Xbox gaming division, the people said.
This round is expected to be smaller than similar layoffs last year. This time, the cuts are projected to be less than 2.5% of the company’s 220,000-person workforce, the people added. They asked not to be identified discussing sensitive matters.
The company is planning to announce the layoffs next week, although the exact timing could change. Some affected employees will be offered new roles immediately, one of the people said.
In previous years, Microsoft has sometimes cut jobs around the start of its new fiscal year on July 1. Last year, the company eliminated 6,000 roles in May and an additional 9,000 employees, or about 4% of the company’s workforce, in July.
The plans underscore Microsoft’s moves to rein in costs as it ramps up spending on AI. The company has also been under pressure from Wall Street over concerns that AI could replace software services, including, in theory, some Microsoft offerings. The stock has slumped about 17% in the past month.
Microsoft earlier this year announced a voluntary retirement program offering buyouts to employees level 67 and below in the US who had 70 or more years of age and service. About 7% of Microsoft’s 125,000 US workforce, or nearly 9,000 employees, was eligible.
About one-third of eligible employees took the buyout, in line with expectations, one of the people said. That allowed Microsoft to cut a lower percentage of its workforce compared to last year, this person added.
Sales employees with commission-based compensation were excluded from this retirement buyout offer, according to an internal document viewed by Business Insider.
Xbox layoffs have been expected since new gaming CEO Asha Sharma sent a memo to employees calling for a “reset” of the business.
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