Microsoft Sheds 2.1% of Global Staff as Xbox Slashes a Fifth of Its Workforce
Published on 07/06/2026 at 21:35 | Redaktion boerse-global.de
The sweeping cuts are part of a wider reorganisation that sees the Redmond-based company pour $190 billion into artificial intelligence infrastructure, even as it trims thousands of roles in sales, consulting and video games.
Xbox alone is losing 3,200 positions — roughly one in every five employees. According to an internal announcement, 1,600 staff must leave immediately, with the remainder departing over the next twelve months. Xbox chief Asha Sharma told employees the division’s business “is not healthy right now,” pointing to shrinking profit margins.
Management layers at Xbox will collapse from fourteen to between three and five. Four studios are leaving the Microsoft fold: Compulsion Games and Double Fine will become independent, while Ninja Theory and Undead Labs are being sold to new owners. Titles already in development will continue, the company said, as the long-term ambition remains reaching more than one billion daily users.
Parallel to the job cuts, Microsoft is accelerating its AI push. Planned investment in artificial-intelligence infrastructure stands at $190 billion. Amy Coleman, Microsoft’s head of human resources, stressed that the layoffs are not a direct swap of people for machines. “The technology changes how we work and requires a reallocation of resources,” she said.
The trend mirrors a broader industry pattern. Tech giants are expected to collectively spend over $700 billion on AI by 2026. Microsoft itself eliminated roughly 6,000 jobs in May 2025 and another 9,000 in July 2025.
A study of 2.85 million job postings between June 2025 and June 2026 suggests AI is not reducing the overall demand for tech talent. Instead, employers are seeking new skills: systems design, judgement, and confidence using AI tools. Data from EY-Parthenon shows CEO expectations for AI-driven headcount reductions have fallen sharply: only 20% now anticipate AI-related staff cuts, down from 46% in January 2025.
Research by Ramp and Revelio Labs indicates that companies investing heavily in AI actually hire more people than those that do not.
Not all workers share the same outlook. Entry-level opportunities are shrinking for Generation Z. According to a study by Jobcloud, the number of starter positions has dropped 32% since the end of 2022, as routine tasks are increasingly automated. In European banking, Morgan Stanley forecasts 200,000 jobs will disappear by 2030.
Yet a countercurrent has emerged. Firms including Klarna and Nvidia have in certain areas shifted back toward human employees, citing automation that failed to deliver expected results or surging costs for AI compute resources.
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