Microsoft is cutting 4,800 jobs, about 2.1 per cent of its global workforce, as the technology giant continues to reduce costs while increasing its investment in artificial intelligence.

The company’s Xbox division will account for 3,200 of the job cuts through fiscal year 2027.

In a memo to employees, Xbox CEO Asha Sharma said 1,600 positions would be eliminated on Monday, while another 1,600 roles will be phased out over time.

“I recognize that a year-long restructuring creates additional challenges,” Sharma wrote. “Unfortunately, it is not possible to make all the necessary changes in a single day.”

The latter reductions are in addition to the companywide total of 4,800 jobs being cut immediately.

The layoffs represent about 20 per cent of Xbox’s workforce, according CNBC, citing a person familiar with the matter, who spoke on condition of anonymity because they were not authorized to discuss the internal restructuring publicly.

Microsoft has been the weakest-performing megacap technology stock so far in 2026, with its shares down 19 per cent as of Friday’s close.

Investors have grown concerned that generative artificial intelligence could disrupt large segments of the enterprise software market, while Microsoft’s own AI models and services have yet to achieve widespread commercial success.

The company has also continued to trim its workforce. In 2025, Microsoft carried out several rounds of layoffs, including one that eliminated 9,000 jobs.