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\u2013 Microsoft<\/a> is laying off about 2.1% of its workforce, roughly 4,800 jobs, as it restructures around AI priorities.\n<\/p>\n \u2013 The company says AI is changing work but denies the cuts are direct replacements for jobs.<\/p>\n \u2013 The gaming and Xbox divisions are among areas being restructured amid rising AI infrastructure costs.\n<\/p>\n Microsoft is cutting about 2.1% of its workforce, or roughly 4,800 jobs, as the Windows maker restructures parts of its commercial and Xbox businesses, joining other tech titans in a wave of layoffs<\/a> as they shift investments towards AI infrastructure.\n<\/p>\n The company\u2019s shares were down 1.5% in early trading.<\/p>\n Big Tech<\/a>\u2018s historic AI outlays, set to top $700 billion this year, are piling pressure on companies to show returns from the technology<\/a> and offset the rising cost of rolling it out across their businesses. Amazon and Meta Platforms have also laid off thousands of employees this year.\n<\/p>\n In a memo to employees, Chief People Officer Amy Coleman<\/a> said AI was changing how work gets done by automating some routine tasks, but said the layoffs were part of a broader effort to realign resources and operating structures with the company\u2019s priorities.\n<\/p>\n \u201cI also want to be direct that the roles eliminated today are not being replaced by AI. At the same time, what\u202f is \u202ftrue is that AI is changing how work gets done.\u201d\n<\/p>\n Microsoft announced the cuts on Monday following a nearly 23% slump in its shares in the first six months of 2026, their worst first-half performance since 2022.\n<\/p>\n The software giant earlier this year offered voluntary buyouts to about 7% of its U.S. workforce, or about 9,000 employees. Microsoft often trims jobs near the end of its fiscal year in June as it sets spending plans for the new year.\n<\/p>\n \u201cMicrosoft has been managing down its workforce in order to pay for its AI investments. By keeping its headcount down they have been able to accelerate revenue growth while maintaining the same margins,\u201d said Gil Luria<\/a>, managing director of D.A. Davidson<\/a>.\n<\/p>\n Booming AI demand has powered growth at Microsoft\u2019s Azure<\/a> cloud-computing business, which was the exclusive seller of OpenAI<\/a>\u2018s models until April, but the mounting cost of building data centers to run those services is squeezing its cash flows.\n<\/p>\n