Microsoft is a big tech company.

It made this announcement on Tuesday, July 7, 2026, at 10:14 am.

Microsoft is laying off thousands of workers around the world.

In short, many people will lose their jobs.

ABC News knows that Microsoft staff in Australia will be affected.

Microsoft will cut about 2.1 percent of its global workforce, which is a big change.

What happens next is not clear.

Microsoft will report its financial results later this month.

Australian Microsoft employees will be part of the global layoffs.

Microsoft announced it would cut 4,800 jobs, which is about 2.1 percent of its workforce.

Microsoft Australia has about 3,000 staff, but it's not known which areas will be affected.

Big tech companies are spending a lot on AI, which is putting pressure on them to show results.

There are questions about whether the AI boom will benefit Australia beyond short-term construction.

Other companies like Amazon and Meta have also laid off thousands of workers this year.

Atlassian and WiseTech Global have also cut jobs in Australia due to AI replacing manual work.

Microsoft's chief people officer said the eliminated roles are not being replaced by AI.

Xbox is changing, which led to 1,600 immediate layoffs.

Microsoft is overhauling its Xbox gaming business and selling up to five studios.

The Xbox restructuring will involve 3,200 job cuts, including 1,600 layoffs on Monday.

Microsoft's Xbox gaming restructure will involve 3,200 job cuts, including 1,600 immediate layoffs.

Despite spending billions on Xbox, Microsoft has struggled to compete with Sony and Nintendo.

Microsoft is shifting its strategy to distribute games across more platforms.

The Xbox restructuring will involve the divestment of four studios.

Some studios will become independent, while others will be spun off to focus on specific games.

The management of Arkane Studios is reviewing options with its workers' union in France.

AI spending is increasing.

An analyst said the announcement seems like a portfolio reallocation rather than a catalyst for the stock.

The market will reward Microsoft for showing that AI monetization is scaling faster than costs.

There's been a big financial boom, but it's been overshadowed by global politics.

Microsoft offered voluntary buyouts to about 7 percent of its US workforce earlier this year.

Microsoft often trims jobs near the end of its fiscal year to set spending plans.

Microsoft has been managing its workforce to pay for AI investments.

By keeping its headcount down, Microsoft has been able to accelerate revenue growth while maintaining margins.

Booming AI demand has powered growth at Microsoft's Azure cloud-computing business.

The company forecast quarterly Azure sales above estimates, but also issued a big spending projection for 2026.

AI tools have emerged as a threat to Microsoft's software business, and data center demand has forced Xbox console price increases.

ABC/Reuters

Tuesday, July 7, 2026, at 10:14 am.

Tuesday, July 7, 2026, at 12:09 pm.

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