Microsoft to cut up to 9,000 more jobs as it invests in AI

Microsoft, one of the world’s largest technology companies, has announced that it will lay off up to 9,000 employees in its latest round of job cuts this year. The company did not specify which departments would be most affected, but reports suggest that the Xbox video gaming division will be hit hard. This move is part of Microsoft’s broader strategy to invest heavily in artificial intelligence, or AI, as it shifts its focus toward new technologies. The company is planning to spend a massive $80 billion on building data centers that will help train and support advanced AI models.

A Microsoft spokesperson explained that these organizational changes are necessary to help the company succeed in a rapidly changing marketplace. The layoffs represent about 4 percent of Microsoft’s global workforce, which totals 228,000 people. Some video game projects have already been impacted by these cuts. According to internal emails and reports from gaming news outlets, Microsoft has told its gaming staff that the planned reboot of the popular first-person shooter series Perfect Dark, as well as another game called Everwild, will be cancelled. The Initiative, the studio behind the Perfect Dark reboot, will also be shut down. Other studios owned by Microsoft, such as Turn 10, which makes Forza Motorsport, and ZeniMax Online Studios, the developer of Elder Scrolls Online, are also seeing job losses. Matt Firor, the director of ZeniMax Online Studios, announced he would be leaving after more than 18 years at the company.

The impact of these layoffs is being felt beyond Microsoft’s own studios. Romero Games, an independent studio in Ireland co-founded by John Romero, the creator of Doom, has also had to cut staff after its publisher pulled funding for its game. The head of Romero Games expressed sadness over the situation, saying that both the game and the studio were affected. This is the third round of layoffs Microsoft has announced in 2025, including a previous cut of 6,000 jobs in May. Most of the positions being eliminated are in Redmond and Bellevue, Washington, where Microsoft has its main offices.

Microsoft’s decision to focus more on AI is similar to what other major tech companies are doing. The company is investing in new data centers and developing specialized computer chips for AI. Last year, Microsoft created a new AI division and brought in a new leader to run it. Microsoft is also a major investor in OpenAI, the company behind the popular chatbot ChatGPT. However, there have been reports of tension between Microsoft and OpenAI recently. Microsoft has also struggled to sell its own AI assistant, Copilot, to business customers, as many workers prefer using ChatGPT.

Other tech giants are also competing for top AI talent. Meta, the parent company of Facebook and Instagram, has been offering huge signing bonuses to attract the best AI experts, with some offers reportedly exceeding $100 million. Amazon’s CEO has said that AI could eventually replace some jobs at his company. These developments show how the tech industry is rapidly changing, with companies making big investments in AI while also making difficult decisions about their workforce. As Microsoft and other companies adapt to these changes, the future of work in the technology sector remains uncertain.