Microsoft announces plans to lay off up to 9,000 employees as the company intensifies its $80 billion investment in AI and data centres, with its gaming division among those reportedly affected.

Microsoft Layoffs Signal Major Shift Amid AI Expansion


Tech giant Microsoft has confirmed plans to lay off as many as 9,000 employees worldwide, marking the latest in a series of workforce reductions as the company accelerates its focus on artificial intelligence and next-generation technology.

The move, which will affect approximately 4% of Microsoft’s global workforce, comes as the company embarks on an ambitious $80 billion investment in AI infrastructure, including the construction of large-scale data centres to train advanced AI models.

Xbox Division Among Those Facing Cuts


While Microsoft has not provided specific details on which divisions will be hit hardest by the latest round of redundancies, reports suggest that the company’s Xbox gaming unit is likely to be among those affected. Some video game development projects are also understood to have been impacted as part of the restructuring.

A Microsoft spokesperson told the BBC: “We continue to implement the organisational changes needed to better position the company for success in a dynamic market.”

The announcement adds to a growing list of job cuts at the Redmond-based firm in 2025, with this marking the fourth round of layoffs this year alone. In May, the company revealed plans to eliminate 6,000 positions, citing similar reasons of realigning operations to reflect evolving market demands.

Redmond and Bellevue Bear the Brunt


An official database in Washington state shows that more than 800 of the job losses will be concentrated in Redmond and Bellevue, two key Microsoft hubs in its home state.

The tech industry at large has faced significant turbulence over the past year, with global giants including Google, Amazon, and Meta all initiating substantial workforce reductions amid efforts to pivot towards AI development and digital transformation.

Balancing AI Growth With Workforce Cuts


Microsoft’s decision to downsize comes alongside its aggressive AI expansion plans. The company has already committed tens of billions of dollars to AI research, development, and infrastructure, as it seeks to maintain a competitive edge in a rapidly evolving technology landscape.

The company’s $80 billion investment in AI, announced earlier this year, is set to fund the development of major data centres and enhance computing power necessary for training large language models and other AI systems.

While Microsoft’s AI ambitions have been welcomed by investors, the human cost of these transformations has sparked concern within the tech community. Analysts suggest that as AI reshapes operations, traditional roles in areas such as gaming, software engineering, and administrative support may face increasing pressure.

With Microsoft’s workforce totalling around 228,000 employees globally, the latest cuts reflect a growing trend among technology firms to streamline operations while doubling down on AI and digital infrastructure.

As the company continues to navigate this period of transition, many within the industry will be watching closely to see how Microsoft balances its AI aspirations with the welfare of its global workforce.