Microsoft has announced it is cutting close to 5000 positions worldwide, with the sweeping redundancies set to ripple through its six Australian offices, which together employ more than 3000 people. The company's chief people officer confirmed the scale of the cuts on Tuesday, marking one of the most significant workforce reductions in the tech giant's recent history.
Microsoft's chief people officer, Amy Coleman, confirmed that approximately 4800 roles would be eliminated — representing 2.1 per cent of the company's global workforce. It is understood the Australian operations are included in that figure, though the exact number of local positions affected has not been specified.
Why Microsoft Is Cutting Jobs Now
Coleman framed the lay-offs as a strategic move to keep the company competitive as the technology landscape shifts rapidly, particularly with the rise of artificial intelligence. She said the changes were designed to "keep Microsoft positioned to deliver for customers in a fast-changing industry."
Notably, Coleman was direct in pushing back against the idea that AI was simply replacing workers. "The roles eliminated today are not being replaced by AI," she said, while acknowledging that automation is reshaping day-to-day work. "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."
Coleman also pointed to the company's broader track record with workforce transitions, noting that Microsoft had redeployed more than 4000 employees into new roles over the past year. She pledged that those affected by the current cuts would be supported "with care and respect."
"The people whose jobs are impacted today are our colleagues and friends," Coleman said. "They have made meaningful contributions to Microsoft, and we are deeply grateful for everything they have done."
Xbox Hit Hardest With More Than 3200 Roles Gone
Microsoft's gaming division, Xbox, is bearing the heaviest share of the cuts. More than 3200 positions are expected to be shed across the division over the coming year, with Xbox chief executive Asha Sharma confirming that roughly half of those redundancies had already been carried out. Four game studios were also let go as part of the restructure.
Sharma described the cuts as a painful but necessary "reset" for a division that had been operating at profit margins up to 10 times lower than comparable platform and publishing businesses. She also pointed to the global AI-driven surge in demand for computer components, which she described as "the most severe hardware crisis in its history," saying the shortage had driven component prices to extraordinary levels and squeezed Xbox's operations further.
"I know this is painful. These changes will directly affect people who have poured their creativity into building Xbox," Sharma said.
Part of a Broader Tech Industry Reckoning
The Microsoft lay-offs do not exist in isolation. The cuts are the latest in a wave of workforce reductions to sweep through the global technology sector, with major companies including Meta, Amazon and Australian-founded software firm Atlassian all having announced significant job cuts over the past year.
Despite the short-term reductions, Microsoft has indicated it expects its overall employee numbers to grow again in the medium to long term as it pivots further into artificial intelligence. The company is projecting that the current restructuring will ultimately position it for stronger growth as AI becomes more central to how businesses operate.
For the thousands of Australian workers employed across Microsoft's local offices, the coming weeks are likely to bring significant uncertainty as the company works through the practicalities of which roles will be affected domestically.
