Microsoft has confirmed a new round of layoffs, as had been speculated since last week. The company dismissed around 4% of its workforce, representing approximately 9,100 employees, according to information obtained by Variety.
It is worth noting that this is only one of several rounds of layoffs Microsoft has carried out in recent years. In January of this year, the company had already cut around 1% of its total workforce. In May, another 6,000 employees were dismissed, followed by 300 more in June. In 2023 alone, the technology giant laid off more than 10,000 people, demonstrating that mass layoffs have become a recurring practice in the company's recent strategy.
Game Studios Are Affected by the New Wave of Cuts
The cuts also had a significant impact on the Xbox division. According to Bloomberg, employees at ZeniMax—Bethesda's parent company—and King, responsible for mobile titles such as Candy Crush Saga, are among those affected by this new round of layoffs. King, for example, is expected to dismiss around 10% of its team, representing approximately 200 employees.
In addition, the layoffs led to the closure of The Initiative studio and the cancellation of the new Perfect Dark. Rare, responsible for Everwild, was also affected, resulting in the game's cancellation. Studios supporting the Call of Duty franchise suffered cuts, and around half of the Forza Motorsport development team lost their jobs.
In this new round of cuts, however, approximately 2,000 professionals from the Xbox division were reportedly affected, while the other 7,000 dismissals occurred across different Microsoft departments, with a greater concentration outside the United States. In the previous round in May 2025, when 6,000 employees were laid off, most dismissals were concentrated at the company's headquarters in Redmond, Washington.
Mass Layoffs Reflect an AI-Focused Strategy
According to The Seattle Times, although the presence of generative technologies influences the situation, the main reason behind the mass layoffs would be Microsoft's intention to free up resources for investment in Artificial Intelligence. In 2025 alone, more than 15,000 employees have already been dismissed from several areas, including Windows, Xbox, Surface, and especially the sales department—identified as one of the hardest hit so far.
Microsoft has invested heavily in Artificial Intelligence, concentrating a large share of its investments in this field. One of its main steps was integrating the Copilot assistant into the Office suite, as well as making AI tools available for internal use by its employees.
The company sees AI as a transformative technology with an impact on society comparable to that of electricity. Internally, Microsoft also anticipates a change in the professional profile, in which mastering AI will be as important as knowing how to program was in the last decade.
The race for leadership in Artificial Intelligence is increasing the pressure on Microsoft. Having been caught by surprise by the cloud-computing revolution in the past, the company is determined not to make the same mistake again. In 2025 alone, Microsoft invested around US$80 billion in infrastructure dedicated to AI, reinforcing its commitment to the technology.
With spending rising and no clear timeline for a return on investment, Microsoft is reducing costs. This puts at risk even employees who chose the company because of its organizational culture.
