Microsoft lays off 4,800 employees, with cuts hitting Xbox and sales

In short: Microsoft says it is laying off around 4,800 employees, with many of the cuts in Xbox and its commercial sales teams.

What happened

Microsoft is laying off around 4,800 employees as it starts its new financial year. The Verge reports this is about 2.1 percent of Microsoft’s workforce.

Most of the affected roles are in Microsoft’s commercial sales organization and its Xbox division. Commercial sales is the part of the company that sells Microsoft products and services to other businesses.

In an internal memo, Microsoft’s chief people officer, Amy Coleman, said the company needs to adjust how it operates as the tech industry changes and as AI affects how work gets done. She also wrote that the roles eliminated are not being replaced by AI. Her point was that AI is changing how people work, even if it is not directly taking over these specific jobs.

This comes a year after Microsoft cut around 9,100 employees, according to The Verge.

Why it matters

For customers, layoffs can affect how quickly a company responds to support requests, sells products to businesses, or releases and maintains games and services. For workers across the industry, Microsoft’s message is also a reminder that companies may reorganize teams as AI tools become more common, even when leaders say AI is not the direct reason for job cuts.

Source: The Verge AI