Microsoft may be preparing for a significant round of job cuts in January 2026, with reports suggesting that between 5% and 10% of its global workforce could be affected.
According to insider accounts and anonymous posts circulating online, the layoffs could take place in the third week of January, potentially putting between 11,000 and 22,000 jobs at risk worldwide. Microsoft has not issued any official confirmation.
Sources indicate that teams within Gaming (Xbox), Azure cloud services, and global sales operations may be among the most impacted. The reported cuts are believed to be part of a broader restructuring strategy aimed at flattening middle management and increasing the ratio of individual contributors to managers.
Microsoft had approximately 228,000 full-time employees as of mid-2025. The company has already reduced its headcount by nearly 15,000 roles over the past year through multiple layoffs tied to cost realignment and shifting business priorities.
Analysts link the potential job cuts to Microsoft’s aggressive push into artificial intelligence and cloud infrastructure. The company is expected to spend more than $80 billion on capital investments in 2026, largely focused on data centres, AI chips, and advanced AI tools. While revenue and profits remain strong, the scale of AI-related spending is believed to be driving tighter cost controls in other areas.
This would not be Microsoft’s first major workforce reduction in recent years. In 2025, the company cut about 6,000 jobs during a major reorganisation, with earlier rounds also affecting Xbox and other divisions as part of ongoing restructuring efforts.
Across the wider tech industry, large-scale layoffs have become common as companies adapt to AI-driven changes. Tech giants such as Meta, Amazon, and Intel have collectively cut tens of thousands of jobs amid shifts in strategy and automation.
If confirmed, Microsoft’s January move could signal the first major wave of tech layoffs in 2026, highlighting the growing tension between heavy AI investment and workforce reductions across Big Tech.
