Microsoft has confirmed that it will lay off as many as 9,000 workers, in the technology giant’s latest wave of job cuts this year.
The company said several divisions would be affected without specifying which ones but reports suggest that its Xbox video gaming unit will be hit.
Microsoft has set out plans to invest heavily in artificial intelligence (AI), and is spending $80bn (£68.6bn) in huge data centres to train AI models.
A spokesperson for the firm told the BBC: “We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.”
The cuts would equate to 4% of Microsoft’s 228,000-strong global workforce.
Some video game projects have reportedly been affected by them.
According to an internal email seen by The Verge and gaming publication IGN, Microsoft has told gaming staff that the planned reboot of first-person shooter series Perfect Dark, along with another title, Everwild, will be cancelled.
The Initiative, a Microsoft-owned studio behind the Perfect Dark reboot, will also be shut down, the memo stated.
Job cuts have also affected staff across wider studios owned by Microsoft, including Forza Motorsport maker Turn 10 and Elder Scrolls Online developer ZeniMax Online Studios, according to employee posts on social media seen by the BBC.
Matt Firor, studio director of ZeniMax Online Studios, announced on Wednesday he would be leaving his position in July after more than 18 years at the studio.
“While I won’t be working on the game anymore, I will be cheering you on and adding to the thousands of hours I’ve already spent in-game,” said a post attributed to Mr Firor by ZeniMax on X.
Romero Games Ltd, an independent studio based in Galway, Ireland – co-founded by Doom developer John Romero – has also cut staff after funding for its game was axed by its publisher.
“These people are the best people I’ve ever worked with, and I’m sorry to say that our game and our studio were also affected,” said Mr Romero in a post on X.
Microsoft has initiated three other rounds of redundancies so far in 2025, including in May when it said it would cut 6,000 roles.
An official database maintained by Washington state shows that more than 800 of the positions eliminated will be concentrated in the city of Redmond as well as in Bellevue, another Microsoft hub in its home state.
In recent years, like many other big technology firms, Microsoft has refocussed its business towards developing AI, including investing in data centres and chips.
Last year, the company hired British AI pioneer Mustafa Suleyman to lead its new Microsoft AI division.
A top Microsoft executive recently told the BBC that the next half century will “fundamentally be defined by artificial intelligence,”, changing the way we work and interact with one another.
Microsoft is also a major investor and shareholder in OpenAI, the company behind the popular chatbot ChatGPT, although the relationship has reportedly grown tense in recent months.
Bloomberg reported that Microsoft has struggled to sell its AI assistant, known as Copilot, to business customers because many office workers prefer ChatGPT.
The layoffs among rank and file workers at Microsoft come as major US tech companies court top AI talent.
Meta, which owns Facebook and Instagram, has been poaching talent from rivals to form a ‘superintelligence’ lab.
Chief executive Mark Zuckerberg has reportedly been personally involved in recruitment.
OpenAI boss Sam Altman said recently that members of his team had been getting offers of more than $100m (£74.3m) as “signing bonuses” from Meta.
Last month, Amazon boss Andy Jassy said he expected AI would replace some of his firm’s workers.
Additional reporting by Liv McMahon
