Microsoft trims workforce amid AI investment and Xbox overhaul

Microsoft is trimming about 4,800 jobs, roughly 2.1% of its global workforce, as it reorganizes parts of its commercial business and Xbox operations while increasing investment in AI infrastructure. The company announced the cuts on July 6, following a period in which its shares were down about 23% in the first half of 2026, its worst performance since 2022; early trading saw shares fall another 1.5%. In a memo, Chief People Officer Amy Coleman said AI is automating some routine tasks, but emphasized that roles eliminated are not being replaced by AI. The article notes Microsoft previously offered voluntary buyouts to about 9,000 U.S. employees (~7% of its U.S. workforce). It also cites Azure growth driven by AI demand while high data-center costs weigh on cash flow. Microsoft’s gaming unit is being restructured after margins fell to 3%. Amazon and Meta have also announced job cuts this year.