In the early trading session on Monday, Microsoft\u2019s shares plunged 1.5 per cent, Reuters reported. In a memo to employees, the Chief People Officer, Amy Coleman, said AI was changing how work gets done by automating \u2060some routine tasks, adding that the layoffs were part of a broader effort to realign resources.<\/p>\n
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<\/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 \u200bAI is changing how work gets done,\u201d Coleman added, Reuters reported.<\/p>\n
The development comes after shares of Microsoft witnessed a 23 per cent decline in the first six months of 2026, the worst performance by the Windows maker since 2022.<\/p>\n
Earlier this year, Microsoft offered voluntary buyout to about 7 per cent, or 9,000 employees of its workforce in the United States. The software company, however, often cuts jobs at the end of its financial year in June while setting spending plans for the upcoming year, Reuters reported.<\/p>\n
Big tech companies\u2019 expenditure on AI is reportedly set to cross $700 billion this year as pressure mounts on firms to show returns from technology and cover the rising cost of rolling it out across their businesses. Amazon and Meta also announced thousands of layoffs<\/a> in their companies this year.<\/p>\n Xbox CEO Asha Sharma had said last month that business needs a \u201creset\u201d and the profit margin has declined to 3 per cent, which could mean that a forced restructuring would be required, including a potential merger and acquisition.<\/p>\n Story continues below this ad<\/p>\n \u201cExcluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, \u2060platform and \u200bhardware subsidy, but our annual revenue has declined nearly half a billion during \u200bthat time,\u201d Sharma had said in a memo published on Microsoft\u2019s website.<\/p>\n Expand<\/p>\n