AI News Monitor

Microsoft will eliminate as many as 9,000 jobs in its latest round of layoffs this year, the tech giant confirmed on Friday, marking its fourth workforce reduction in 2025 as it shifts focus toward artificial intelligence.

The cuts, which amount to about 4% of Microsoft’s 228,000 global employees, will affect multiple divisions, including its Xbox gaming unit. According to internal memos obtained by The Verge and IGN, the company has canceled a planned reboot of the first-person shooter series Perfect Dark, along with the game Everwild. The Initiative, the Microsoft-owned studio behind Perfect Dark, will also be shuttered.

Other gaming studios under Microsoft’s umbrella, including Forza Motorsport developer Turn 10 and Elder Scrolls Online creator ZeniMax Online Studios, have also seen cuts. Matt Firor, ZeniMax’s studio director, announced his departure after 18 years, writing on X that while he would no longer work on the game, he would remain a devoted player.

The layoffs extend beyond Microsoft’s own studios. Romero Games, an independent developer in Ireland co-founded by Doom creator John Romero, also trimmed staff after a publisher pulled funding. “These people are the best I’ve ever worked with,” Mr. Romero said in a post, “and I’m sorry to say our game and studio were affected.”

Microsoft has framed the reductions as part of a broader realignment toward AI. The company is investing $80 billion in data centers to train AI models and recently hired British AI expert Mustafa Suleyman to lead its new Microsoft AI division. A company spokesperson told the BBC that the changes were necessary to “position the company for success in a dynamic marketplace.”

But the pivot comes amid challenges. Microsoft, a major investor in OpenAI, has reportedly struggled to sell its AI assistant, Copilot, to businesses, as many workers prefer OpenAI’s ChatGPT. Meanwhile, competition for top AI talent has intensified, with Meta aggressively recruiting researchers—sometimes offering $100 million signing bonuses, according to OpenAI CEO Sam Altman.

The layoffs reflect a turbulent period for the tech sector, where even industry leaders are streamlining operations to prioritize AI. Amazon CEO Andy Jassy recently predicted that AI would replace some jobs, signaling further upheaval ahead.

According to Washington State records, more than 800 of Microsoft’s job cuts will be concentrated in Redmond and Bellevue, home to its headquarters. The company has now shed thousands of roles in 2025 alone, including 6,000 in May.

As Microsoft doubles down on AI, the human cost of its transition continues to mount.