The rumours of a fresh layoff round from Microsoft spread panic unlike anything, especially after the mega layoff spree in 2025. Rumours suggested that the Redmond-based tech firm was planning to layoff between 11,000 and 22,000 employees globally, with many suggesting that the Xbox and other major divisions could be hurt the most. Microsoft, however, was eager to speak out on the matter, dismissing all the rumours of a fresh layoff. At least for now.
Microsoft’s Chief Communications Officer, Frank X. Shaw, has denied widespread rumours of a fresh round of layoffs in January 2026. Shaw dismissed the reports as baseless speculation, especially as the company doubles down on its investments in artificial intelligence.
The claims, which represent approximately 5-10% of Microsoft’s 220,000-person global workforce, surfaced earlier this week and quickly spread across social media, tech forums, and news outlets, thus raising anxieties among employees who were still recovering from multiple rounds of job cuts in 2025. Microsoft was among the few brands that let go of the most number of employees in 2025.
Microsoft layoffs 2026: How the rumours spread
The speculation originated from a TipRanks article and quickly gained traction across social media and tech forums. The claims suggested potential cuts targeting teams in Azure cloud services, the Xbox gaming division, and global sales units. The rumoured reductions, estimated at 5-10% of Microsoft’s roughly 220,000-strong workforce, were linked to escalating costs from the company’s heavy investments in artificial intelligence infrastructure.
Microsoft spokesperson’s denial on social media
Microsoft’s Chief Communications Officer, Frank X. Shaw, dismissed the claims on a social media response. Replying to posts about the alleged layoffs, Shaw stated the layoff reports were “100 percent made up / speculative / wrong.” Upon being provoked in another exchange, which stated, “Will revisit this and will change the post status to CONFIRMED layoffs in a few weeks,” Shaw replied “I eagerly await”.
The rumours evoked concerns among employees and industry observers, especially after Microsoft’s recent history of workforce adjustments. In 2025, the company conducted multiple rounds of layoffs across its global offices, totalling over 15,000 positions. It included a significant cut of approximately 9,000 jobs in July that affected gaming operations, such as studio closures and project cancellations. Xbox head Phil Spencer had previously described those changes as necessary for enhancing focus and agility.
Despite the layoffs last year, Microsoft achieved a market valuation exceeding $4 trillion in 2025. The company is adopting a stricter return-to-office policy, which is set to enforce at least three days of on-site work per week starting February 23, 2026, for employees near offices.
