New Delhi– Microsoft has announced a fresh round of layoffs, cutting about 4,800 jobs, or roughly 2.1 percent of its global workforce, as the company continues to pour money into artificial intelligence while trying to streamline operations.
The job cuts come as major technology companies balance large AI investments with cost-control measures. Amazon and Meta have also reduced their workforces this year as spending on AI infrastructure continues to climb. Global AI-related investments by major technology firms are expected to exceed $700 billion in 2026.
Microsoft’s latest cuts follow a difficult first half of the year for the company. Its shares fell nearly 23 percent during the first six months of 2026, marking its weakest first-half performance since 2022.
Earlier this year, Microsoft offered voluntary buyouts to nearly 9,000 employees in the United States, representing about 7 percent of its domestic workforce. The company has historically made workforce adjustments near the end of its fiscal year in June as it prepares budgets and spending plans for the year ahead.
Microsoft’s Azure cloud computing business has continued to benefit from strong demand for AI services, but the company is facing rising costs tied to data center expansion. Until April, Azure was the exclusive cloud provider for OpenAI’s models, helping fuel growth in Microsoft’s cloud business. However, the heavy spending needed to support AI services has increased pressure on cash flow.
Despite those costs, Microsoft remains optimistic about its AI business. In April, the company forecast quarterly Azure revenue above Wall Street expectations and projected capital expenditures of $190 billion for 2026, well above analysts’ estimates. The company is scheduled to report its latest financial results later this month.
AI adoption is also changing Microsoft’s traditional software business by automating routine tasks. At the same time, rising memory chip prices driven by demand from AI data centers have increased production costs. Those higher costs have led Microsoft to raise Xbox console prices amid sluggish demand for gaming hardware. (Source: IANS)
