Technology giant Microsoft is reportedly preparing for its most significant round of job cuts in recent years. According to an investment news report from TipRanks, the company is set to announce layoffs this month, potentially affecting a massive number of employees across its global operations.
Scale and Timing of the Planned Layoffs
The report indicates that Microsoft may lay off between 11,000 and 22,000 jobs across various divisions. The announcement is expected in the third week of January 2026. If these figures hold true, this would represent the largest single layoff round for the Windows maker, surpassing previous cuts.
This would also mark the fourth consecutive January that Microsoft has initiated workforce reductions. The primary driver behind these cuts, as per the report, is the rising cost of artificial intelligence (AI) investment. A substantial portion of Microsoft's capital is being directed towards building data centers, developing chips, and creating advanced AI tools.
A Pattern of Job Cuts and the AI Spending Spree
Microsoft, one of the world's foremost proponents of AI, invested a staggering upwards of $80 billion in the technology last year, with no signs of slowing down in 2026. Analyst projections had previously suggested that to offset the increased capital depreciation costs from relentless data center expansion, Microsoft might need to cut at least 10,000 employees annually.
The recent history shows a clear trend of workforce trimming. In 2023, Microsoft cut 10,000 jobs, approximately 5% of its workforce at the time. In January 2024, the Microsoft Gaming team bore the brunt with 1,900 job cuts (around 1%). The year 2025 proved particularly severe, starting with performance-related cuts of slightly less than 1% in January, followed by a 3% reduction in May, and another 4% in July. In total, Microsoft eliminated more than 15,000 jobs in several rounds throughout 2025.
Which Teams Are at Risk and New Office Policy
Reports from workers cited by TipRanks point to several key divisions that could be significantly impacted. These include the Azure cloud teams, the Xbox gaming unit, and global sales functions. Analysts believe the company is strategically moving funds away from payroll and reallocating them into long-term technological assets.
As a result, middle managers and teams working on older products may face a higher risk of layoffs. Conversely, roles directly tied to AI research and core cloud infrastructure work are viewed as more stable, reflecting the company's unwavering focus on maintaining competitiveness in the AI arena.
In a related development, the TipRanks report also reveals that Microsoft plans to enforce stricter office attendance policies starting February 23, 2026. Employees living within 50 miles of a company office will be required to work on-site for a minimum of three days per week.
