Microsoft reportedly eyeing massive January layoffs — but the “AI obsession” shows no signs of slowing

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Microsoft may announce another large round of layoffs in the next few weeks. Online discussions and reports suggest January could be a challenging month for many of its employees.

According to HR Digest, although there aren’t any current layoff rumors, the company is still likely to announce job cuts in the near future.

According to reports and discussions on the professional network Blind, Microsoft’s potential layoffs will probably focus on positions considered less essential or redundant, rather than those directly involved in developing AI. Comments suggest middle managers are the most vulnerable, aligning with past patterns at the company.

Okay, so I’ve been following the news, and honestly, a lot of what’s being said about potential layoffs is still just rumors. There’s a lot of chatter on forums, but it’s all anonymous, so it’s hard to know what’s true. While I’m worried layoffs *could* happen, I’m trying not to panic and take everything with a grain of salt until we get official confirmation.

According to HR Digest, Microsoft frequently restructures its workforce in January, making layoffs this month a likely possibility.

There are reports suggesting Microsoft may be planning workforce reductions. One rumor indicates the cuts could impact between 5% and 10% of employees, potentially affecting 11,000 to 22,000 jobs. Another report suggests a smaller reduction of 3-4%, or around 6,000-9,000 people. If accurate, these cuts would be comparable in size to those made in July and May of this year.

If the rumors prove to be accurate, the job cuts will start on January 18.

Another year of layoffs at Microsoft?

In 2025, Microsoft eliminated over 15,000 positions. This reduction in workforce seems driven by two main goals: improving how efficiently the company operates, and freeing up resources for significant investments in artificial intelligence.

Last July, Microsoft laid off 9,000 people, and reports indicated this was to free up resources for investment in artificial intelligence technology.

According to The Seattle Times, Microsoft isn’t using its investments in AI to eliminate jobs. Instead, after spending several years and a lot of money building the necessary infrastructure, the company is simply looking for ways to reduce expenses.

As an analyst, I’ve been tracking Microsoft’s investments, and their recent commitment of $80 billion to infrastructure really stood out. It represents a significant increase – more than tripling their spending from the previous year, where they invested $25 billion. This shows a clear acceleration in their infrastructure plans.

Lots of people, including some on our team, feel Microsoft is overly focused on AI. This focus seems to be driving significant changes within the company, like the recent layoffs, even though there’s been negative public reaction – as seen with the trending hashtag “Microslop.”

Last December, Microsoft’s CEO, Satya Nadella, stated that the company’s large size is actually hindering its progress.

The company has also established a 30% ‘accountability margin’ for Xbox, a target many consider to be unrealistic.

Microsoft is so large that decisions about hiring and layoffs are complex. It appears that investments in artificial intelligence and the need to maintain strong profits are currently the biggest influences on those decisions.

What are your thoughts on Microsoft’s current approach to AI? Share your opinion in the comments and participate in the poll!

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2026-01-07 18:10