Following the announcement that Xbox would be laying off a total of 3,200 employees across the 2027 financial year, Microsoft's EVP and Chief People Officer, Amy Coleman, announced on July 6 that the tech giant would be laying off a total of 4,800 workers, or around 2.1% of its global workforce. With the majority of the layoffs coming from the aforementioned Xbox layoffs, that leaves 1,600 workers being laid off, the bulk of which are from its Commercial Business division. According to the announcement on the Microsoft Blog, Microsoft is conducting layoffs because its "business is changing because the world around it is changing," and "customers' needs are shifting, the business models that serve them are shifting."
Coleman says that Microsoft has needed to respond to the changes in the industry by adjusting resources and roles in order to have the "greatest impact for our customers." She also adds that the employees being laid off will not be replaced by AI, although she acknowledges that "AI is changing how work gets done," and she goes on to explain that many of the daily tasks performed at Microsoft can be automated, which will mean Microsoft will need to "keep learning, keep building new skills, and keep adapting as the works evolves." Coleman says that, in the year leading up to the layoffs, Microsoft has redeployed more than 4,000 employees into new roles within Microsoft, and that over 30% of those eligible for the program opted for its voluntary retirement program.