Microsoft joins AI-driven tech layoff wave with 4,800 job cuts
Yahoo Finance ·
STORY: Microsoft is cutting more than 2% of its workforce, or roughly 4,800 jobs, joining other tech titans in a wave of layoffs as they shift investments to AI infrastructure. :: Microsoft In a memo to employees, Microsoft's Chief People Officer said the roles being eliminated won't be replaced by AI, but are part of a broader effort to realign resources as AI changes how the company works. Booming AI demand has powered growth at Microsoft's Azure cloud-computing business, which was the exclusive seller of OpenAI's models until April. But the mounting cost of building data centers to run those services is squeezing the company's cash flows. To help offset that, Microsoft is restructuring parts of its lagging gaming unit, described by its division head last month as needing a "reset" as profit margins have dropped. A report in The Information last month said the company is considering a potential spinoff of its Xbox unit, or restructuring it as a wholly owned subsidiary. Big Tech's historic AI outlays, set to top $700 billion this year, are putting pressure on companies across the sector to show returns on AI and offset the rising costs of rolling it out across their businesses. Amazon and Meta Platforms have also laid off thousands of employees this year. :: Microsoft Microsoft announced the cuts on Monday following a nearly 23% slump in its shares in the first six months of 2026, their worst first-half performance since 2022. Shares fell further on Monday, dropping more than two percent at one point in morning trading.
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