Recent cuts at Microsoft, which have severely affected the company’s Xbox gaming division and led to the dismissal of over 9,000 employees, may be an attempt by the corporation to cut costs after huge investments in artificial intelligence.
Recent cuts at Microsoft, which have severely affected the company’s Xbox gaming division and led to the dismissal of over 9,000 employees, may be an attempt by the corporation to cut costs after huge investments in artificial intelligence.
This is reported by the publication Windows Central, citing The Seattle Times, which notes that in total, since the beginning of 2025, Microsoft has already laid off about 15,000 employees from many departments, including gaming, sales, and marketing.
The company is said to be looking to reduce its headcount to free up more capital for AI spending. Specifically, it plans to invest more in AI infrastructure and technology and is making various cuts across multiple organizations and divisions to fund these efforts.
«Microsoft’s push into artificial intelligence doesn’t mean the company is replacing workers with technology. Rather, the significant infrastructure spending over several years is forcing Microsoft to look for ways to cut costs,» The Seattle Times reports.
However, a significant portion of the positions Microsoft has cut in recent months have been ones that could be replaced by AI. The company has invested heavily in AI technologies that can fix bugs and write code, and is reportedly planning to make the use of AI mandatory, conducting checks to ensure this when evaluating performance.
Microsoft announced that it plans to spend $80 billion on AI infrastructure next year to keep up with the rest of the AI market. That’s $25 billion more than in the previous fiscal year. In recent weeks, reports have emerged that the multi-billion dollar partnership between Microsoft and OpenAI has become strained as the two companies pursue different goals.
The recent layoffs, which affect more than 15,000 people, come as Microsoft is coming off one of its best financial years in history, overtaking Apple in market capitalization and trailing only NVIDIA as the world’s most valuable company.
Microsoft recently confirmed that it is laying off 9,100 employees, or about 4% of its workforce, in another round of layoffs. The Xbox division, known as Microsoft Gaming, as well as some of its already announced games, were hit hard.
Among them was Everwild from Rare, which was announced in 2019 and is now canceled.
It later became known that the reboot of the classic FPS series Perfect Dark was also no longer in development, and The Initiative studio, which worked on this new project, would be completely closed.
Another project that suffered from the cuts was a new MMORPG from Zenimax Online Studios, the creators of the popular MMO Elder Scrolls Online. It was codenamed «Blackbird» and had been in development since 2018.
