Microsoft is preparing to cut about 5,500 jobs in another round of layoffs as it continues to shift billions of dollars toward artificial intelligence (AI), an expected move that also reignites debate over the company’s use of the H1-B visa program.According to Business Insider, the company could announce layoffs as early as next week. The planned layoffs are expected to affect less than 2.5% of Microsoft’s global workforce. Based on approximately 228,000 employees as of June 30, this equates to approximately 5,500 jobs.The layoffs are expected to span multiple business units, including sales, consulting and Xbox gaming. A person familiar with the plan told Business Insider that some affected employees may be offered alternative positions within Microsoft following the announcement.The move follows previous rounds of layoffs. Microsoft laid off about 6,000 employees and then announced another layoff of about 9,000 people in July 2025, accounting for nearly 4% of its workforce. The funding round is expected to be smaller as many eligible U.S. employees accepted a voluntary retirement program launched earlier this year. The retirement plan is available to employees grade 67 and below who meet the company’s age and service requirements. Sales associates who receive commissions are not eligible.Microsoft traditionally evaluates its employees at the start of the new fiscal year. At the same time, it continues to increase spending on artificial intelligence and cloud infrastructure. The company invested more than $100 billion in artificial intelligence and cloud projects in fiscal 2026, with most of the spending going directly to artificial intelligence chips and related infrastructure.The Xbox division is also expected to undergo a major shakeup after years of heavy investment in gaming content, hardware and platforms. Earlier this year, Xbox Gaming CEO Asha Sharma told employees that the business needed a “reset.”The expected layoffs also reignite criticism of Microsoft’s continued hiring of foreign workers through the H1-B visa program.A viral post onThe post reads: “Microsoft has been the sixth-largest H-1B applicant in the U.S. since 2020, bringing in foreign workers year after year even as it cuts American jobs. Just a few months ago, it quietly made a buyout of older U.S. workers. About a third of the 9,000 eligible workers dropped out. This round’s results are even better. LinkedIn, which is wholly owned by Microsoft, laid off 875 employees this year. people, approximately 5% of the workforce, continue to file H-1B petitions despite a 12% increase in revenue. Xbox was hit hardest. According to reports, the company’s layoffs under new CEO Asha Sharma’s “reset” will be the largest single layoff in gaming history. Record profits and remains one of the largest H-1B sponsors in the United States. Thousands of American jobs disappeared. “Meta announced plans to cut about 10% of its workforce this year, while Amazon said it would cut about 16,000 jobs globally. Industry data also shows that U.S. technology companies have announced more than 123,000 layoffs in 2026, with growing investment in artificial intelligence considered to be the main reason behind many layoffs.
