Microsoft lays off 4,800 employees

After a year of cutting 9,100 employeesMicrosoft is laying off more workers today as it begins its new fiscal year. The software maker is laying off about 4,800 employees today, roughly 2.1 percent of its workforce. Most of the employees affected by today’s cuts work in Microsoft’s commercial sales division or the company’s Xbox division.

In an internal memo to employees, Amy Coleman, Microsoft’s executive vice president and chief human resources officer, blamed the job losses on the changing technology industry and “the need to adjust resources and roles and change the way we work” to respond to how artificial intelligence will impact companies like Microsoft. “I also want to be clear that the roles being eliminated today will not be replaced by AI,” Coleman says. “At the same time, what is true is that AI is changing the way work gets done.”

The layoffs will affect about 1,600 Xbox employees today, with plans to eliminate a total of about 20 percent of Xbox jobs by the end of the fiscal year. Microsoft is also selling four Xbox Studios and is considering selling another as it looks to “reset” its Xbox business after years of struggle. You can Read more about Xbox layoffs and the affected studios here.

“Decisions like this are never easy, and you have my commitment that we are constantly looking for ways to reduce the need to cut jobs,” Coleman says. “Whenever possible, our priority is to place people in new roles that align with the company’s highest priorities and greatest areas of opportunity. Over the past year, we have redeployed more than 4,000 employees into new roles, including another 500 employees this month.”

Microsoft was also trying to avoid layoffs through its partners Voluntary retirement program. US employees whose combined years of service added up to their age of 70 or more were eligible for voluntary retirement, and the package would include five years of access to Microsoft health care coverage, a lump sum cash severance payout, and six months of vesting for unvested stock options.

“More than 30 percent of eligible employees chose to participate in our recent voluntary retirement program, and we will continue to explore similar approaches in the future,” Coleman says. “While this does not change the difficulty of today’s news, we will continue to do everything we can to create opportunities for our employees, reduce the need for job cuts where possible, and support those affected responsibly with care and respect.”