Microsoft is laying off 4,800 employees

The next year cut around 9,100 employeesMicrosoft is cutting jobs again today as it kicks off its new fiscal year. The software maker is laying off about 4,800 workers today, about 2.1 percent of its workforce. Most of the employees affected by today’s cuts are in Microsoft’s commercial business or the company’s Xbox division.

In an internal letter to employees, Amy Coleman, vice president and chief executive of Microsoft, blamed the loss of jobs on companies changing technology and “the need to change things and roles and change the way we work” to respond to the impact of AI on companies like Microsoft. “I also want to be clear that the roles that have been eliminated today are not being replaced by AI,” Coleman says. “At the same time, what is true is that AI is changing the way work is done.”

The layoffs will affect about 1,600 Xbox employees today, with plans to eliminate about 20 percent of Xbox jobs by the end of the fiscal year. Microsoft is selling four Xbox studios and selling another studio as it looks to “rehabilitate” its Xbox business after years of struggles. You can read more about the Xbox cancellation and the studios involved here.

“Decisions like these are never easy, and it is my commitment that we are always looking for ways to reduce the need for layoffs,” Coleman says. “Whenever possible, our goal is to place people in new roles that align with the company’s core values ​​and areas of greatest opportunity.” In the past year, we have deployed more than 4,000 employees in new roles, including another 500 this month.”

Microsoft also tried to avoid layoffs with its own voluntary retirement program. US workers whose combined years of service totaled 70 years or more were eligible for voluntary retirement, and the package will include five years of Microsoft health care coverage, cashless payments, and six months of discretionary benefits.

“More than 30 percent of eligible employees chose to participate in our current retirement program, and we will continue to explore similar options in the future,” says Coleman. “While this does not change the complexity of today’s issues, we will continue to do everything we can to provide opportunities for our people, minimize the need for layoffs where possible, and provide reasonable support to those affected with care and respect.”