Microsoft plans thousands of layoffs even as it ramps up AI spending

Microsoft is preparing to cut thousands of jobs, according to a Business Insider report, in a reduction expected to affect less than 2.5% of its global workforce. The move comes as the company pours record sums into data centres and artificial-intelligence infrastructure.

The layoffs would extend a wave of restructuring across the technology sector, where firms are reallocating budgets toward AI while trimming other areas. Microsoft has not publicly confirmed the figures, and the exact timing and affected divisions remain unclear, the report said.

Investors will watch whether the cuts support margins as capital spending climbs. Microsoft is due to update on its AI investments and cloud growth at its next earnings report, which analysts expect to help shape sentiment toward the wider sector.