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Tech Firms Keep Cutting Staff as Microsoft Eliminates 4,800 Roles

Boards are shifting payroll into AI infrastructure, prompting repeated small layoffs that raise rehiring and training costs.

Overview

  • Microsoft, which announced the cuts Tuesday, said it will eliminate about 4,800 roles or roughly 2.1% of its global workforce and that those positions are not being replaced by AI.
  • Xbox will take a larger hit with roughly 1,600 immediate layoffs and about 3,200 more job cuts planned this fiscal year that the company says will shrink the division by about 20%.
  • Many tech firms have adopted a pattern critics call "forever layoffs," making repeated, smaller reductions while still hiring for AI roles and investing heavily in data centers and compute.
  • Roughly half of companies that replaced people with AI have later rehired staff after automated systems failed on nuance or quality, a reversal that raises severance, recruitment and retraining costs.
  • Evidence shows disruption at the task level rather than whole occupations, with clerical, entry-level, middle-skill and some older workers most exposed and raising concern about damaged career pipelines and fiscal effects.