Microsoft is eliminating roughly 4,800 jobs as it opens a new financial year, The Verge reported Monday, with the cuts concentrated in its commercial sales operation and Xbox business.
The reductions amount to about 2.1 percent of Microsoft’s workforce, according to The Verge. They come about a year after the company cut around 9,100 employees, another round that also hit Xbox.
For the workers affected, the stated logic is corporate reallocation in the age of AI, which is the kind of phrase that tends to do a lot of unpaid labor. In an internal memo reported by The Verge, Amy Coleman, Microsoft’s executive vice president and chief people officer, told employees the company needed to change roles, resources, and operating methods as the technology industry shifts and AI changes how companies work.
Coleman also said the eliminated positions are not being replaced by AI. That distinction matters: Microsoft is tying the restructuring to AI-driven changes in work, while saying the cuts are not a one-for-one automation swap.
Xbox faces a larger reset
The Xbox organization is taking a sharp hit. The Verge reported that about 8 percent of Xbox jobs are affected in the current round, and that Microsoft plans to remove around 15 percent of Xbox roles by the end of the financial year.
Microsoft is also selling four Xbox studios and considering a sale of another studio, according to The Verge. The moves are part of what the company is treating as a reset of the Xbox business after years of trouble, The Verge reported.
The sales business is the other main target. Microsoft’s commercial sales group handles the company’s relationships with business customers, the part of the machine that turns products such as Windows, Office, Azure, and the company’s AI tools into contracts. The Verge reported that many of the affected employees are in that organization.
Coleman told employees that decisions like these are difficult and said Microsoft is looking for ways to reduce the need for job eliminations, according to the memo reported by The Verge.
The company’s message leaves two things side by side. Microsoft is saying AI is changing how work gets done inside the company and across the industry. It is also saying the people losing their jobs today are not being directly swapped out for AI systems. For employees in Xbox and commercial sales, that distinction does not change the immediate outcome: thousands of jobs are going away while Microsoft reshapes where it wants people and money assigned.
This story draws on original reporting from The Verge.
