Microsoft Corp. could lay off approximately 2.5% of its workforce as early as next week, Business Insider reported on Tuesday, citing people familiar with the matter. The move would affect around 5,700 jobs based on the company's roughly 228,000 full-time employees as of June 2025, according to an SEC filing last year. The potential announcement timing aligns with July 1, the start of Microsoft's new fiscal year, although the timing could still change according to the report. Business Insider reported that some affected employees are expected to be offered new roles immediately. The layoffs would continue Microsoft's pattern of workforce reductions as part of what the company has described as routine organizational restructuring amid shifting industry dynamics.
Microsoft Announced 6,000 Job Cuts in June 2025
Microsoft announced in June 2025 that it would eliminate 6,000 roles, or about 4% of its workforce, primarily across product and engineering teams. The company had undertaken significant workforce reductions in 2023 and 2024, along with smaller targeted cuts thereafter. Earlier this year, Microsoft announced a voluntary retirement program. About 7% of Microsoft's 125,000 U.S. workforce, or nearly 9,000 employees, was eligible, according to Business Insider. About one-third of eligible employees took the buyout, in line with expectations, according to the report.
Xbox CEO Asha Sharma Outlined Business Reset in May Memo
Layoffs in Microsoft's gaming division had been reported, notably since senior executive Asha Sharma took over as CEO of Xbox in February. In a memo sent to Xbox employees last month and leaked in the media, Sharma outlined that she plans to "reset the business," which she described as being "not in a healthy spot."
MSFT Stock Fell 23% in First Half of Year
MSFT shares fell 23% in the first six months of the year, marking their worst half-year performance since 2000 and the weakest showing among the Magnificent Seven stocks in the first half of 2026. Microsoft has come under pressure amid a broader selloff in software stocks, hefty capital spending plans and intensifying competition in AI from Google, Anthropic, and OpenAI. MSFT shares rose about 1% in overnight trading ahead of Wednesday's open.
Analysts Rate MSFT Buy with $561 Average Price Target
The retail sentiment for MSFT on Stocktwits has climbed upward since mid-last month and was 'bullish' as of early Wednesday. "$MSFT One of those stocks you buy and don't look at it again for another 12 months. Market very rarely presents plays like this with such high asymmetrical reward. PT in December of $600 is absolutely possible. Patience will pay off," a trader wrote on Stocktwits. On Wall Street, 53 out of 56 analysts rate the stock 'Buy' or higher, and the remaining three rate it 'Hold,' per Koyfin. Their average price target of $561.11 implies a 50% upside from the stock's last close.
FAQ
How many employees could be affected by Microsoft's reported layoffs?
Business Insider reported that Microsoft could lay off approximately 2.5% of its workforce, which would affect around 5,700 jobs based on the company's roughly 228,000 full-time employees as of June 2025 according to an SEC filing last year.
When did Microsoft announce its previous round of job cuts?
Microsoft announced in June 2025 that it would eliminate 6,000 roles, or about 4% of its workforce, primarily across product and engineering teams. The company also offered a voluntary retirement program earlier this year to about 9,000 eligible U.S. employees, of whom about one-third accepted the buyout.
