Microsoft has confirmed it will eliminate approximately 9,000 positions across its global workforce. This marks the company’s second significant round of layoffs this year, and its second largest overall, following the cuts of 11,000 jobs last year and 6,000 earlier this May, as part of an ongoing restructuring effort to streamline operations and reduce management layers.The cuts represent less than 4% of Microsoft’s 228,000-person workforce and will impact employees across multiple divisions, geographies, and experience levels. Xbox gaming division faces particularly steep reductions, with sources indicating substantial job losses in the gaming sector.
Xbox hit hardest in this round of job cuts
Xbox leader Phil Spencer addressed affected employees directly, stating the company must “end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.”The gaming cuts include approximately 200 positions at King, the Candy Crush developer Microsoft acquired through Activision Blizzard, representing 10% of that division’s staff. European subsidiaries including Zenimax also confirmed job reductions, according to the Seattle Times.Spencer acknowledged the difficult timing in his internal memo: “I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger.”
Microsoft targets middle management layers in efficiency drive
The layoffs specifically target reducing organizational hierarchy, with Microsoft focusing on eliminating management positions that create barriers between individual contributors and senior executives. This strategic approach mirrors similar moves by tech competitors Amazon and Meta, who have streamlined their corporate structures to improve decision-making speed.Company sources indicate the restructuring aims to “increase agility and effectiveness” by removing redundant supervisory roles while preserving front-line talent and leadership positions. The flattened organizational structure represents Microsoft’s broader effort to maintain competitiveness in rapidly evolving technology markets.
Layoffs continue despite Microsoft’s strong financial performance
This latest round follows Microsoft’s May announcement cutting over 6,000 positions, primarily in product and engineering roles, plus an additional 305 cuts in June. The company has eliminated more than 15,000 jobs since January 2024, including its biggest ever round in 2025, which saw around 11,000 cuts. Despite the workforce reductions, Microsoft reported robust financial results with $25.8 billion in net income for its most recent quarter, representing 18% year-over-year growth. CNBC reported the company remains among the S&P 500’s most profitable enterprises.“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said.The layoffs coincide with the start of Microsoft’s 2026 fiscal year, when the company traditionally announces organizational restructuring. Affected employees will receive severance packages, healthcare coverage, and job placement assistance, with priority consideration for other Microsoft Gaming positions.Spencer emphasized the contributions of departing employees: “Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted.”
