Microsoft is preparing to cut just under 2.5% of its workforce in a fresh round of layoffs that could be announced as early as next week, Business Insider reported on Tuesday, citing sources.

Reuters could not independently verify the report, and Microsoft declined to comment to Reuters.

The reductions will affect thousands of roles across the company, including positions in sales, consulting, and the Xbox gaming division, according to the Business Insider report. Xbox is already facing significant budget pressures. Earlier this month, Bloomberg News reported that the gaming unit was planning major layoffs and cuts to marketing and other spending after raising console prices worldwide. The Information also reported earlier in June that Microsoft was exploring options for Xbox, including a potential spinoff or restructuring as a wholly owned subsidiary.

The latest cuts follow a layoff of nearly 4% of Microsoft's workforce in July 2025, one of the company's largest in recent years. As of June 30, 2025, Microsoft had roughly 228,000 full-time employees, according to a regulatory filing.

The technology industry continues to trim headcount as firms balance heavy investment in artificial intelligence infrastructure with cost control. Meta announced this year that it would cut 10% of its workforce, while Amazon laid out plans to eliminate roughly 16,000 jobs globally.