Microsoft could welcome 2026 with layoffs, cutting up to 22,000 jobs

Microsoft gave headache to its global workforce last year with multiple rounds of layoffs. The surprising part was that the job cuts came as the company reported revenue and net profits of around $75 billion. Speaking in numbers, in May 2025, the tech giant slashed more than 6,000 roles, followed by another 9,000 in July. The company has been prioritizing efficiency and doubling down on AI investments for some time now, and layoffs are part of that.

Microsoft could welcome the new year with up to 22,000 layoffs

Now, insiders suggest that 2026 could be even worse in terms of layoffs, and it will hit employees in this month. The news comes via TipRanks, which reports that Microsoft is planning a new round of layoffs in January, potentially affecting between 11,000 and 22,000 employees worldwide.

If the rumored figure is accurate, that would account for roughly 5–10% of its 220,000 global workforce. Teams most at risk appear to be in Azure cloud, Xbox gaming, and the global sales division. While Microsoft hasn’t officially confirmed the plan, sources suggest that the decision is likely related to the company’s long-term AI strategy and resource allocation.

Microsoft’s obsession with AI is evident in its products, especially Windows and Microsoft 365 apps. Well, those are all part of the company’s AI spending. It wouldn’t be wrong to say it’s burning money on AI. The numbers tell a similar story. In Q1 FY26 alone, capital expenditure stood at $34.9 billion, with projected total AI-related costs exceeding $80 billion for the year. Much of this investment has gone toward data centers, advanced chips, and AI tools, hinting that Microsoft isn’t in mood to slowdown on AI push anytime soon.

Those working on AI projects are reportedly immune from the rumored layoffs

In other words, employees directly involved in Microsoft’s AI projects are safer from potential layoffs, while teams outside of it are at higher risks of losing their jobs this month. Adding another layer of tension is Microsoft’s mandatory office policy, which requires employees living within 50 miles of a Microsoft office to be on-site at least three days per week. Some staff have even called the policy Microsoft’s indirect way of encouraging voluntary exits. While the company has yet to issue an official statement, analysts say the rumors could be true given last year’s multiple rounds of layoffs.

It’s clear that Microsoft is reworking its priorities, and AI is at the forefront of it. Speaking of that in the context of employees, they should be ready to adapt to new expectations, or prepare for an uncertain future. garammar check without changing my words please keep sanme words change whatever feels wrong fix typos too.

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