‘This isn’t about AI’: Microsoft’s chief people officer explains 4,800 job cuts

Microsoft has announced plans to lay off around 4,800 employees, or roughly 2.1% of its global workforce, as part of a broader restructuring exercise aimed at aligning the company's workforce and investments with changing business priorities. The cuts will have a significant impact on the company's gaming division, with 3,200 roles being eliminated at Xbox, including about 1,600 immediate layoffs.The move comes amid growing speculation that artificial intelligence is driving workforce reductions across the technology sector. However, Amy Coleman, Microsoft's executive vice president and chief people officer, sought to dispel that perception in a message to employees, stressing that AI is not the reason behind the latest layoffs."I also want to be direct that the roles eliminated today are not being replaced by AI," Coleman wrote. "At the same time, it is true that AI is changing how work gets done. Some of the tasks we do every day can now be automated, and that means we all need to keep learning, keep building new skills, and keep adapting as the work evolves."She added that Microsoft's transformation remains ongoing and that the company must continue adapting to a rapidly evolving technology landscape. "Our customers are navigating this same shift, and they're counting on us to help them through it. We can't do that well unless we're doing it ourselves," Coleman said.Microsoft said the restructuring aims to help the company focus on delivering differentiated customer value and better align resources with long-term priorities.According to Coleman, the changes focus on business transformation rather than directly replacing workers with AI tools.A major portion of the layoffs will occur within the Xbox division, which has been undergoing significant changes following years of heavy investment, including Microsoft's acquisition of Activision Blizzard. Despite those investments, the company has struggled to close the competitive gap with industry rivals Sony PlayStation and Nintendo.Microsoft has also been shifting its gaming strategy in recent years by making more of its titles available across multiple platforms rather than relying heavily on console-exclusive releases. The restructuring reflects broader efforts to reposition the gaming business and improve its performance.The announcement comes at a time when major technology companies are investing heavily in artificial intelligence infrastructure while simultaneously reviewing operating costs. Microsoft has committed significant capital to AI, cloud computing and data centre expansion, though the company maintains that the latest workforce reductions are part of a wider organisational restructuring rather than an AI-driven replacement programme.