Microsoft is Expected to Lay Off ‘Thousands’ of Staff as Fiscal Year Ends

Microsoft is expected to announce a massive wave of layoffs imminently. As the company’s fiscal year ended on June 30, it is reported to be reducing its workforce by “thousands”.

According to a report from Business Insider, those familiar with the situation have said Microsoft is projected to be reducing its total staffing by “less than 2.5%.” Currently, the company employs 220,000 people worldwide across its many divisions. The latest round of layoffs will be made to cut costs.

The layoffs are expected to be announced as early as next week, as the company heads into a long weekend due to Independence Day. However, “exact timing could change,” the report states. It’s claimed that some employees will be offered a new role immediately, likely to avoid disruptions across operations.

Microsoft is believed to be considering a broad range of layoffs affecting many divisions. This includes sales, consulting, and the Xbox branch. Since mid-June, reports that Microsoft layoffs would affect the Xbox gaming division have become increasingly prevalent. Xbox CEO Asha Sharma and CCO Matt Booty previously sent employees a memo, warning them about the required “work to reset the business.”

It’s widely believed that Microsoft could announce closures of multiple Xbox studios, including Montreal’s Compulsion Games. The studio developed the Canadian Game Award’s Game of the Year, South of Midnight, mere weeks ago. Microsoft’s layoffs may also affect other notable studios, including Double Fine, Ninja Theory, and Undead Labs. Recently, The Verge reports claim Arkane may be shuttered as well, effectively cancelling the in-development Blade game.

In some cases, it’s believed that Microsoft is exploring buyout options for its Xbox studios, which are facing closures. If the aforementioned 5 studios can iron out plans to either purchase their own independence or net out options to be purchased by another publisher, Microsoft is claimed to be open to these options. However, these deals take time to finalize, and it’s yet to be known whether that time will be granted.

Microsoft is no stranger to cutthroat layoffs. In 2025, the company laid off 6,000 employees, roughly 3 percent of its workforce, to streamline operations and focus on AI. Months later, in July of 2025, Microsoft cut another 9,000 jobs, cancelling Xbox titles like Rare’s Everwild. The Initiative, the studio working on the Perfect Dark reboot, was also shuttered as part of this round of layoffs.