January 7, 2026 @ 1:37 PM ET: I’m happy to report that Microsoft is not preparing for a massive wave of layoffs this month. When we first shared the news we explained there were rumors and anonymous forum posts suggesting layoffs were likely. Our Executive Editor Jez Corden specified that the rumors were “False on the Xbox side at least” in an X post. Frank Shaw, Chief Communications Office at Microsoft, responded to a post about the rumors stating they were, “100 percent made up / speculative / wrong.” His comment was made in reply to Corden’s X post about Xbox-related layoffs. But Shaw’s comment appears to be about the layoff rumors in general. I’ve updated the titles and straplines of this piece so people scanning our front page and social media see the most recent information. The original story appears below for context.
It looks like another massive wave of layoffs could occur at Microsoft in the coming weeks. Recent forum activity and reports indicate that January could prove a difficult month for thousands of Microsoft employees.
The outlet also shared that threads on Blind, an anonymous network for professionals, suggest that potential layoffs will likely target “non-core or overlapping roles rather” as opposed to frontline AI developers. Middle managers are the most likely to be affected, according to comments and Microsoft’s recent history.
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At the time of publication, much of the information regarding potential layoffs is unconfirmed or based on anonymous forum posts. While there is a good chance layoffs are on the way, it’s important to take this information with a grain of salt.
As noted by HR Digest, Microsoft often makes personnel changes in January, so it would make sense to see cuts this month.
One rumor states that between 5 to 10% of Microsoft’s workforce could be affected by cuts. That would represent 11,000 to 22,000 jobs. A different post on Blind suggests a 3-4% wave of cuts, which would be around 6,000-9,000 people. That would make the cuts similar in scope to what we saw in July and May of 2025.
If the rumors prove to be accurate, the job cuts will start on January 18.
Another year of layoffs at Microsoft?
Microsoft CEO Satya Nadella has called the company’s size a “massive disadvantage.” (Image credit: Getty Images | MANDEL NGAN)
Microsoft cut over 15,000 jobs in 2025. The push for cuts appears to be two-fold. Microsoft CEO Satya Nadella wants to improve operational efficiency at the company. Simultaneously, Microsoft is investing heavily in AI.
When Microsoft cut 9,000 employees in July of last year, it was reported that the move was made so the tech giant could invest more into AI infrastructure.
“Microsoft’s push into AI doesn’t mean the company is replacing workers with the technology. Rather, the significant cost of building out the infrastructure over multiple years has Microsoft looking to trim costs where it can,” said The Seattle Times back in July.
Microsoft announced its intentions to spend $80 billion on infrastructure. That marked a massive jump compared to the $25 billion spent in the previous fiscal year.
Many, including several members of our team, have accused Microsoft of being obsessed with AI. That obsession, which continues despite “Microslop” trending on social media, appears to be the cause of many changes at the company, including thousands of job cuts.
In December, Microsoft CEO Satya Nadella said the company’s size “has become a massive disadvantage.”
The tech giant has also set an “accountability margin” of 30% for Xbox, which is generally considered unreasonable.
Due to the sheer size of Microsoft, several factors are in play when it comes to staffing decisions and cuts. Seemingly, investment in AI infrastructure and strict profit demands are two major factors.
Do you think Microsoft should shift its AI strategy? Let me know in the comments and vote in the poll!
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