Microsoft joins AI cost-cutting trend by relying more on its own models

What's happening

Microsoft announced a new round of layoffs, cutting about 4,800 roles (roughly 2.1% of its workforce), with most reductions concentrated in its commercial sales business and Xbox division. The move comes after a prior round that cut about 9,100 employees, and follows a period in which Microsoft shares fell nearly 23% in the first half of 2026. At the same time, TechCrunch reports Microsoft is dialing back AI spend by relying more on its own models as part of a broader cost-cutting trend among big tech companies.

Why it's trending

Companies are reworking AI budgets right now, and Microsoft is combining staff cuts with a shift to internal models to lower expenses.

SignalNewly emerging, confirmed across 2 independent source types.