Microsoft Is Preparing For Massive Employee Layoffs And Prioritizing AI Development.

According to the latest report, Microsoft is preparing to fire plenty of its employees in order to prioritize the development of AI; that could also mean some gaming studios could be abandoned and video games might be cancelled.

This report comes from TipRanks: a source claiming Microsoft is eyeing firing around 11,000 to 22,000 of its employees this January, which is approximately 5-10% of all the company’s workers. These massive layoffs are expected in some crucial departments, including Azure cloud teams and the Xbox gaming unit. Anyway, Microsoft is yet to confirm that.

Speaking of AI development, the report clarifies Microsoft is looking to invest more than $80 billion—for data centers, chips, other AI tools, etc. Let’s not forget that in 2025 the company had spent about $35 billion for AI development, and, as we can see, they increased their spending more than twice for this year.

As was mentioned above, Microsoft has yet to confirm these innovations, but if that report is true, some future video games and gaming studios might be in trouble, as some employees and developers will likely lose their jobs.

What do you think about Microsoft’s strategy to prioritize developing AI over its employees? Share your thoughts in the comments below!