Speculation is mounting that Microsoft is bracing for another major wave of layoffs, reportedly slated for the third week of January 2026.
Between 11,000 and 22,000 positions worldwide could be eliminated, representing roughly 5% to 10% of the company’s total workforce of 220,000 employees. While an official confirmation is still pending, internal reports suggest that the cuts will primarily impact the Azure cloud division, the Xbox gaming unit, and the global sales department.
This workforce reduction is attributed to a significant overhaul of Microsoft’s financial strategy. The tech giant is aggressively reallocating resources toward the advancement of artificial intelligence, sharply increasing its technological investments. In the first quarter of fiscal year 2026 alone, capital expenditures reached nearly $35 billion, with total annual spending projected to exceed $80 billion.
Capital is being shifted away from payroll budgets to fund the construction of massive data centers, the procurement of high-end processors, and the refinement of AI-driven tools. Middle management and teams maintaining legacy products are considered the most vulnerable, whereas roles centered on AI research and development remain relatively secure.
These potential job cuts follow a highly lucrative period for the corporation, which reported approximately $75 billion in net profit over recent quarters.
Source: iXBT.games