Tech giant Microsoft has announced that it will lay off about 9,000 employees worldwide. This is the second largest round of staff reductions in the company's history. Earlier, the company had laid off 11,000 employees in 2024 and 6,000 employees in May 2025.
The cuts will affect less than 4 percent of Microsoft's 2.28 lakh employees. The cuts will be spread across departments, countries and experience levels. The company's Xbox gaming division will be particularly hard hit.
Big blow to Xbox division
Xbox chief Phil Spencer, reacting to the decision, said, “We are going to have to stop or reduce operations in some departments. The goal is also to increase efficiency by eliminating multiple layers of management.”
The cuts will include about 200 jobs at King, the maker of the Candy Crush game acquired by Activision Blizzard, which accounts for 10 percent of the division's workforce. The cuts will also apply to Zenimax's European unit, the Seattle Times reported.
“While we are at a point today where we have more games, more gamers, and more gaming hours, these times of change are challenging. However, our future plans for our platform, hardware, and games remain strong,” Spencer said in a message to his employees.
More focus on management positions
Microsoft is primarily reducing middle management positions in this restructuring. The company says this will speed up decision-making and improve efficiency. Companies like Amazon and Meta have also done similar structural changes in the past.
Microsoft insiders said the company is taking these strategic steps to remain competitive in the emerging technology market. At the same time, there is an emphasis on retaining top-performing employees.
Cuts despite good financial performance
Microsoft has cut more than 15,000 jobs since 2024. That includes 6,000 in May, 305 in June, and 9,000 now. Meanwhile, the company reported net profit of $25.8 billion in the second quarter of 2025, an 18% year-on-year increase. A Microsoft spokesperson explained that “we are making organizational changes to stay successful in a dynamic market.”
The changes are announced with the start of the 2026 fiscal year. Affected employees will be provided with severance pay, health insurance, and job search guidance. The company has also promised to give them a second chance in other positions within the Microsoft Gaming division, on a priority basis. Spencer concluded, “The employees whose roles have ended today are what got us here. We salute their hard work.”