Microsoft tells employees using AI is no longer optional, may impact performance reviews as more layoffs likely in July
This shift is said to align with a broader strategy to improve internal usage of the company's own AI tools. Despite heavy promotion, Copilot's adoption inside the company hasn't met expectations, especially with rising competition from AI coding assistants like Cursor. Now, Microsoft wants employees—especially those building AI products—to use and understand these tools, while still allowing some secure external AI tools like Replit.Microsoft layoffs in July 2025 advertisementMeanwhile, the internal push for AI tools comes at a time when the company has carried out multiple rounds of job cuts. Most of these layoffs have affected thousands of roles within its Xbox division and broader gaming operation. However, another round of layoffs is likely to come in July 2025. According to a Bloomberg report, thousands of jobs in the Xbox division are expected to be cut as soon as next week, as part of a broader company-wide restructuring. This would be the fourth round of job cuts affecting the Xbox unit since 2023.Internal sources reportedly describe the upcoming job cuts as 'considerable,' particularly within the gaming business, which has been under financial scrutiny.The expected layoffs follow the closure of multiple game studios and come amid rising pressure to improve profitability within Microsoft's gaming operations. The company completed its $69 billion acquisition of Activision Blizzard in 2023 and has since been focused on streamlining its gaming business.In June alone, Microsoft laid off more than 300 employees, adding to the 6,000-plus positions eliminated in previous months. Overall, with earlier reductions, Microsoft has laid off over 6,300 employees in recent weeks.- Ends
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