Following its May 2025 workforce reduction of 6,000 employees, Microsoft is reportedly planning thousands of additional job cuts this July. This development represents the company's third significant layoff announcement in 2025, continuing a troubling trend across the technology sector. Microsoft joins numerous other tech firms implementing similar cost-cutting measures in recent months.

The earlier rounds of Microsoft layoffs affected various departments, including its gaming division. The initial January cuts eliminated about 2,300 positions, bringing the total workforce reduction for 2025 to at least 8,300 employees. This represents Microsoft's most severe period of job cuts since early 2023, when the company reduced its workforce by 10,000 positions.

Bloomberg reports indicate Microsoft's upcoming July layoffs will primarily target sales positions. While the company declined official comment, internal April communications revealed plans to outsource significant portions of sales operations to third-party firms. These changes appear to spare the Xbox division, though widespread job losses raise concerns about broader economic impacts. Notably, Microsoft continues substantial investments in artificial intelligence alongside these workforce reductions.

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Microsoft's April announcement regarding sales department restructuring has sparked speculation about potential connections to growing AI implementation. While the company hasn't explicitly stated plans to replace human roles with AI, industry observers note precedents like Google's 2023 admission about AI replacing certain positions. The tech industry faces increasing scrutiny regarding workforce reductions coinciding with AI advancement.

Unlike EA and Take Two's expressed concerns about AI implementation in game development, Microsoft's gaming division has experienced only one confirmed round of layoffs this year. However, uncertainty remains about potential additional cuts in the latter half of 2025 and which business units might be affected.