Microsoft is cutting 4,800 jobs as AI infrastructure spending forces a harder tech reset, equal 2.1% of its workforce and hit commercial operations and Xbox.

Says these roles are not being replaced directly by AI, but AI still sits behind the pressure.

Microsoft’s Azure business is growing, but data center spending is squeezing cash flow.

The company also projected $190B in 2026 spending, far above expectations.

Xbox shows the same squeeze from another angle, with margins reportedly near 3%.

Hardware costs rose, console demand softened, and gaming content spending failed to lift revenue.

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reuters .com/business/world-at-work/microsoft-joins-ai-driven-tech-layoff-wave-with-4800-job-cuts-2026-07-06/