Microsoft axes 2% of workforce as 'AI is changing how work gets done'
Published: 10:22 06 Jul 2026 EDT
Microsoft Corp (NASDAQ:MSFT) shares fell after the software giant said it would cut around 4,800 jobs, or 2.1% of its global workforce, as it restructures to focus on its biggest growth priorities.
The stock was down 1.7% at $383.84 in late morning trading.
In a memo to staff, chief people officer Amy Coleman said the business "is changing because the world around it is changing," adding that Microsoft needed to "adjust resources and roles and shift how we operate."
The cuts will fall mainly in Microsoft's commercial and Xbox divisions, with engineering teams also set to evolve their structures and priorities.
Anticipating that concerns will be raised that the redundancies were directly linked to artificial intelligence, she claimed that "the roles eliminated today are not being replaced by AI," but in the next sentence she acknowledged that "AI is changing how work gets done.
"Some of the tasks we do every day can now be automated, and that means we all need to keep learning, keep building new skills, and keep adapting as the work evolves."
More than 4,000 employees have been redeployed into new roles over the past year, the company noted, with alternatives continuing to be explored to job cuts, including voluntary retirement programmes.
Coleman warned employees that the restructuring was not over, saying: "We are still early on this journey, and there will be more changes ahead."
