Microsoft Layoffs Coming Next Week? MSFT Stock Climbs Overnight, Retail Stays Bullish

• July 1 marks the start of a new fiscal year for Microsoft, and it has typically announced job cuts around this time.
• Previous reports have indicated potential layoffs in Microsoft’s Xbox division.
• The retail sentiment for MSFT on Stocktwits has climbed upward since mid-last month and was ‘bullish’ as of early Wednesday. 

Microsoft Corp. shares rose about 1% in overnight trading ahead of Wednesday's open, after a report said the Windows maker is planning another round of job cuts as early as next week to rein in costs.

Microsoft could lay off about 2.5% of its workforce, Business Insider reported on Tuesday, citing people familiar with the matter. The company had roughly 228,000 full-time employees as of June 2025, according to an SEC filing last year, implying that around 5,700 jobs could be affected.

The move could be announced as early as next week – July 1 marking the start of Microsoft’s new fiscal year – although the timing could still change. Some affected employees are also expected to be offered new roles immediately, the report said.

Microsoft Layoffs

Among the Big Tech companies, Microsoft has been one of the most aggressive in cutting jobs, describing the layoffs as part of routine organizational restructuring amid shifting industry dynamics. 

Following significant workforce reductions in 2023 and 2024, along with smaller targeted cuts thereafter, the company announced in June 2025 that it would eliminate 6,000 roles, or about 4% of its workforce, primarily across product and engineering teams.

Earlier this year, Microsoft announced a voluntary retirement program. About 7% of Microsoft's 125,000 U.S. workforce, or nearly 9,000 employees, was eligible, according to Business Insider.

About one-third of eligible employees took the buyout, in line with expectations, according to the report. 

Layoffs in the company’s gaming division had been doing rounds, notably since senior executive Asha Sharma took over as CEO of Xbox in February. In a memo sent to Xbox employees last month and leaked in the media, Sharma outlined that she plans to “reset the business,” which she described as being “not in a healthy spot.”

MSFT Stock Drags

The development comes during a difficult stretch for Microsoft in the stock market. MSFT shares fell 23% in the first six months of the year, marking their worst half-year performance since 2000 and the weakest showing among the Magnificent Seven stocks in the first half of 2026.

Microsoft has come under pressure amid a broader selloff in software stocks, hefty capital spending plans and intensifying competition in AI from Google, Anthropic, and OpenAI.

MSFT Retail, Analyst View

However, the retail sentiment for MSFT on Stocktwits has climbed upward since mid-last month and was ‘bullish’ as of early Wednesday. 

“$MSFT One of those stocks you buy and don’t look at it again for another 12 months. Market very rarely presents plays like this with such high asymmetrical reward. PT in December of $600 is absolutely possible. Patience will pay off,” a trader wrote.

On Wall Street, 53 out of 56 analysts rate the stock ‘Buy’ or higher, and the remaining three rate it ‘Hold,’ per Koyfin. Their average price target of $561.11 implies a 50% upside from the stock’s last close.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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