As reported before, Microsoft did indeed announce a major layoff this July. In another significant round of restructuring, the company plans to lay off up to 9000 employees, marking its fourth wave of job cuts this year.
Gaming Division Affected
While Microsoft did not officially name the departments affected, multiple reports indicate that the Xbox video gaming division could be among those hit. The layoffs follow a similar move in May 2025, when the tech giant cut approximately 6000 roles, with many based in Redmond and Bellevue, Washington—home to key Microsoft campuses.
Looking up on X, some video games that were in development, such as Perfect Dark and Everwild got cancelled, while WarCraft Rumble, a mobile game by Blizzard is currently in maintenance mode with no new future content in the pipeline. This reduction represents roughly 4% of the company’s global workforce, which currently stands at 228000.
AI at the Forefront of Microsoft’s Strategy
According to the BBC, the layoffs come as Microsoft pivots aggressively toward artificial intelligence, pouring an estimated $80 billion (~RM377 billion) into massive AI-focused data centre infrastructure and chip development. This bold investment reflects Microsoft’s commitment to maintaining a leadership position in the future of AI.
In line with this strategy, Microsoft recently appointed British AI pioneer Mustafa Suleyman to lead its dedicated Microsoft AI division. Speaking to the BBC earlier, a Microsoft executive noted that AI will define the next 50 years, profoundly reshaping how we live and work.
What This Means for the Industry
As Microsoft doubles down on AI and cloud infrastructure, the job cuts signal a broader industry trend: streamlining traditional operations to fund next-gen innovation. With massive capital flowing into AI tools, chips, and data centres, Microsoft appears to be reshaping its future.
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