Microsoft plans another round of layoffs in July 2025 — Which teams could be hit after 6,000+ job cuts already this year?
Following May's culling of over 6,000 roles across engineering and product areas and subsequent cuts in customer-facing units, this marks Microsoft's third major downsizing this year.
Driven by a strategic pivot toward artificial intelligence and massive investment in data centers, this workforce shake-up underscores the tension between innovation and human cost.
As layoffs hit across divisions, employees and analysts are watching closely—will this reshape Microsoft's structure and culture? Stay tuned as we unpack the latest developments and what they mean for the tech landscape.
Microsoft to fire more employees
According to those familiar with the plans, Microsoft will carry out a larger company-wide restructure next week, including another round of significant layoffs in its Xbox gaming sector.
This is the fourth major layoff at Xbox in 18 months, and managers anticipate huge cuts throughout the gaming department. Xbox will be responsible for any impending layoffs, affecting thousands of workers in sales divisions.
According to Bloomberg, Microsoft has a history of making organizational changes during this time, and the layoffs coincide with the company's fiscal year ending on June 30.
Pressure on Microsoft's gaming division's profits
This could be the fourth major layoff at the company in the past 18 months | Credit: Pixaby
Microsoft executives have been putting increasing pressure on Xbox to increase its profit margins before the $69 billion acquisition of Activision Blizzard concluded in 2023. Several staff reductions have occurred in the gaming division, including 1,900 layoffs in January 2024, 650 reductions in September, and the closing of other game studios, including Redfall producer Arkane Austin and Hi-Fi Rush developer Tango Gameworks.
According to sources, Microsoft is reorganizing Xbox distribution in central Europe, with certain regional offices completely shutting down. According to The Verge, these adjustments are meant to streamline operations and align the company with next-generation platform development.
This year's third significant layoff at Microsoft will also impact the company's sales and marketing division
After 6,000 layoffs in May and more than 300 more weeks later, the Xbox layoffs mark Microsoft's third significant employment decrease in 2025.
The corporation has previously stated that it will lay off about 3% of its 228,000 employees to reduce expenses and flatter management.
With some 45,000 employees, Microsoft's sales and marketing division will be most affected by the impending layoffs. The reorganization reflects the tech giant's ambition to balance operational efficiency across other business areas and significant AI investments, which are expected to total $80 billion for data center spending this fiscal year.
Regarding the anticipated layoffs, Microsoft chose not to comment.
For the latest and more interesting tech news, keep reading Indiatimes Tech.
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