Microsoft Plans Another Major Layoff Affecting Over 5,000 Employees Globally
Microsoft is set to implement another round of layoffs this year, expected to impact more than 5,000 employees, approximately 2.5% of its workforce, according to Business Insider. This marks the fourth wave of cuts within about two years. Earlier this year, Microsoft conducted voluntary retirement programs that saw around 3,000 employees leave worldwide. Last year, the company laid off about 15,000 workers between May and July 2025.
The layoffs are anticipated to affect various departments, including sales, consulting teams, and the Xbox gaming division. However, the impact on Microsoft’s Israeli offices in Haifa, Herzliya, and Tel Aviv is expected to be minimal, as most local employees focus on cloud, cybersecurity, and software development rather than Xbox operations. Rising costs for electronic components and chips have put additional pressure on the Xbox division, prompting speculation that Microsoft may spin off its gaming unit into a separate company.
Microsoft last reported its workforce size in summer 2025, stating it employed 228,000 people as of June 2025, a figure similar to June 2024. The upcoming Q2 earnings report on July 29 may reveal a reduced headcount reflecting all four rounds of layoffs since mid-2024. The company faces massive expenditures, estimated at $190 billion, driven by investments in AI services and developing proprietary language models separate from OpenAI. This spending level is among the highest in the tech industry, second only to Amazon’s projected $200 billion capital expenditures for 2026.
Due to these financial pressures, Microsoft and other tech giants like Meta and Amazon have been cutting less profitable or non-strategic operations to focus on AI advancements. Earlier this year, Meta reduced its workforce by about 10%, while Amazon cut approximately 46,000 jobs. Microsoft has not commented on the current layoff reports.
Summary: Microsoft is preparing a new layoff round affecting over 5,000 employees globally, focusing on various departments but sparing most Israeli offices, amid high costs from AI investments and industry-wide tech job cuts.
