Microsoft employees are facing another round of job cuts.
The latest reductions come less than three months after the technology giant announced one of its biggest workforce restructurings of the year.
On July 6, Microsoft said it would eliminate about 4,800 roles, representing roughly 2.1% of its global workforce, as it redirected people and investments toward what it described as its highest priorities.
Most of those cuts fell within Microsoft’s commercial business and Xbox organization.
The company also warned employees at the time that the restructuring was not finished, saying there would be “more changes ahead.”
The July cuts followed other attempts by Microsoft to shrink its workforce without relying entirely on layoffs.
As TheStreet previously reported, Microsoft had offered voluntary buyouts to some senior-level U.S. employees earlier in the year.
By July, Microsoft said more than 30% of eligible employees had chosen to participate in its voluntary retirement program.
The company also said it had moved more than 4,000 employees into new roles over the prior year.
But the reductions continued.
A WARN notice filed in Washington in July showed that 605 Puget Sound-area positions were being eliminated as part of that round.
This included 493 positions tied to Microsoft facilities and another 112 remote positions in the region. Those cuts were scheduled to take effect on Sept. 4.
Now, another round is taking shape.
Microsoft cuts another 277 jobs in Puget Sound
Microsoft began cutting roughly 500 additional jobs on Sept. 22, according to Business Insider.
Most of the reductions will affect its Xbox gaming operation, and a smaller number will affect areas including cloud and artificial intelligence.
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The company has been working toward reducing the Xbox workforce by roughly 20% by the end of its fiscal year.
The new WARN filing reviewed by TheStreet provides a clearer picture of how much of this latest round is landing in Washington.
Microsoft is permanently eliminating 277 positions in the Puget Sound region, including 252 positions at its facilities at One Microsoft Way in Redmond and another 25 remote positions based in the region.
Employees were notified on Sept. 22, and all 277 positions are scheduled to be eliminated on Nov. 21.
Microsoft said the facilities themselves will not close, although some of the affected positions could be moved to Microsoft operations elsewhere.
The filing also shows that the reductions are not concentrated in a single job type.
Affected positions include software engineering, game design, game production, art, technical writing, product marketing, product management, data science, business management, and other corporate functions.
The local numbers do not represent Microsoft’s full global layoffs.
Microsoft’s restructuring primarily affects Xbox
Gaming accounts for much of Microsoft’s latest reduction, but the changes are part of a much broader reset of the Xbox business.
In July, Microsoft described the changes as the “most significant restructure in XBOX history.”
The company said it planned to reduce the division by approximately 3,200 roles throughout fiscal year 2027.
About 1,600 positions were eliminated when the restructuring was announced, while four studios were also slated to leave Xbox under new management.
Microsoft said the changes were necessary because the Xbox business was operating at margins three to 10 times lower than comparable platform and publishing businesses.
The company said it entered the current console generation with a smaller installed base and higher cost structure, while growth from Game Pass, its multi-platform strategy, and a broader content portfolio failed to come as quickly as expected.
The restructuring also goes beyond headcount.
Microsoft said it would reduce management layers within parts of Xbox to no more than five, and as few as three where possible.
The company said some teams had grown to as many as 14 management layers, while its platform organization was 40% larger than at the beginning of the current console generation, despite declines in its player base and playtime.
Microsoft also plans to cut vendor spending by 50%.
The company is also reshaping its studio portfolio.
Compulsion Games and Double Fine Productions are transitioning back to independent status, while Ninja Theory and Undead Labs have entered agreements to move to new ownership.
Microsoft said additional reductions were taking place across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios, although no publicly announced first-party games were being canceled as part of the changes.
The latest September reductions, therefore, represent another stage of a restructuring Microsoft had already warned would unfold over the course of the year.
Why Microsoft’s Puget Sound cuts matter
Puget Sound broadly refers to the Seattle-area region of western Washington, which includes Redmond, Bellevue, Seattle, and surrounding communities.
For Microsoft, however, this is more than another employment market.
Redmond is the company’s home base.
Microsoft’s global headquarters sits on a roughly 500-acre campus in Redmond with more than 125 buildings.
Microsoft also describes Redmond as the place “where it all started” and says the company has played a significant role in the development of the broader Seattle area.
That makes repeated reductions in Puget Sound particularly notable because they are reaching the geographic center of Microsoft’s operations rather than only smaller satellite offices.
The region has also been absorbing job reductions from other major technology employers.
An Axios review found at least 20 rounds of layoffs announced across the Seattle-area technology sector this year.
Through Aug. 18, employers had filed notices covering more than 9,000 planned layoffs in King County and surrounding counties, with about three-quarters of them in the information sector.
Microsoft’s latest cuts add another round to that total.
Big Tech cuts jobs while restructuring around AI
In July, Chief People Officer Amy Coleman said the positions being eliminated were not being replaced by AI, but added that “AI is changing how work gets done,” including by automating some everyday tasks.
The restructuring is nevertheless unfolding while Microsoft pours significantly more money into the infrastructure needed for cloud computing and AI.
Microsoft reported nearly $116 billion in additions to property and equipment during fiscal 2026, up from about $64.6 billion the previous year.
The company’s annual filing says investments in cloud and AI infrastructure are increasing costs as Microsoft adds data centers, servers, networking equipment, and other computing capacity.
Microsoft is hardly alone.
Oracle is also in the middle of another major restructuring.
WARN filings reviewed by TheStreet document at least 2,578 Oracle job cuts across the U.S. this year, including a recent second round affecting roughly 800 workers in Washington and California.
Those reductions are happening as Oracle dramatically increases spending on data centers and AI infrastructure, with the company expecting capital expenditures of $90 billion to $95 billion in its current fiscal year.
Meta has also eliminated thousands of positions this year while reorganizing parts of the company around artificial intelligence and managing growing infrastructure costs.
Amazon has followed a similar path, eliminating thousands of corporate positions while outlining roughly $200 billion in planned capital spending as it expands AI and cloud capacity.
The reasons behind individual layoffs differ from company to company, and Microsoft has explicitly said its eliminated roles are not simply being replaced by AI.
But across the technology sector, the workforce picture is increasingly showing the same two changes happening at once. Companies are committing enormous sums to computing infrastructure while reassessing organizational structures, management layers, and the jobs they need going forward.
