Microsoft is reportedly planning on cutting under 2.5% of its current workforce, with layoffs expected as soon as next week, Business Insider reports.

The workforce reductions will reportedly affect thousands of roles, from sales and consulting, to roles in the gaming devision of Xbox.

According to the report, some employee will be offered new roles immediately after the layoffs.

Microsoft has refued to comment on the report.

The reported layoffs come just over a year after Microsoft laid off thousands of employees in January 2025, the redundancies totalling 4% of its workforce.

The tech giant has recent come under fire from consumers for the rise in Xbox console prices, which are connected to the growing supply chain crisis due to global conflicts and tensions.

The gaming division is planning layoffs as well as cuts to its budgets and marketing, according to reports from Bloomberg.

Xbox may also see a restructuring under Microsoft, according to reports from The Information, which found that the gaming firm may be transformed into a subsidiary.

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Microsoft has yet to confirm if the layoffs will go ahead, and it remains unclear the direct contributing factors for this round of layoffs.

As tech giants continue to cite AI as a reason for workforce transformation, layoffs at Xbox may point to the growing uncertantiy in the components market as a result of stagnating trade and global tensions due to conflicts and strain.