Microsoft is eliminating approximately 4,800 positions, or about 2.1% of its workforce, as the company redirects spending toward artificial intelligence infrastructure. Roughly two-thirds of the cuts will hit its Xbox gaming division, with 3,200 positions to be eliminated through fiscal year 2027. Microsoft’s chief people officer said the eliminated roles are not being replaced by AI, though the company acknowledged AI is automating certain tasks. The cuts follow a difficult first half of 2026 in which Microsoft’s stock declined nearly 23%.
