Microsoft lays off 4,800 as AI investments reshape business

2 min readNew DelhiUpdated: Jul 6, 2026 09:49 PM IST

Shares of Microsoft plunged 1.5% in early trading. (Image Source: Reuters)

Microsoft has announced it will cut 2.1 per cent of its workforce, or nearly 4,800 jobs, as the company plans to restructure its Xbox and commercial business, joining a long list of tech companies in layoffs while shifting investments towards artificial intelligence (AI).

In the early trading session on Monday, Microsoft’s shares plunged 1.5 per cent, Reuters reported. In a memo to employees, the Chief People Officer, Amy Coleman, said AI was changing how work gets done by automating ⁠some routine tasks, adding that the layoffs were part of a broader effort to realign resources.

“I also want to be direct that the roles eliminated today are not being replaced by AI. At the same time, what  is  true is that ​AI is changing how work gets done,” Coleman added, Reuters reported.

The development comes after shares of Microsoft witnessed a 23 per cent decline in the first six months of 2026, the worst performance by the Windows maker since 2022.

Earlier this year, Microsoft offered voluntary buyout to about 7 per cent, or 9,000 employees of its workforce in the United States. The software company, however, often cuts jobs at the end of its financial year in June while setting spending plans for the upcoming year, Reuters reported.

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