As of June 30, 2026, Microsoft boasts a workforce of approximately 223,000 full-time employees, experiencing its first contraction in total staff numbers in nearly ten years. These employees are spread across diverse job sectors, with some falling under collective bargaining agreements. Over the preceding two years, Microsoft has implemented several rounds of extensive layoffs, which were not performance-based, impacting a wide array of departments, subsidiaries, and geographical regions. The underperforming Xbox division has been a focal point of these layoffs, and Microsoft also intends to divest itself of four of its game development studios. The ongoing workforce reductions at Microsoft are aimed at optimizing labor costs, a move necessitated by the capital expenditure pressures stemming from significant investments in AI infrastructure, as well as the cost savings and efficiency improvements realized through the deployment of internal AI applications. Furthermore, Microsoft CEO Nadella has put forth a proposal to reassess the trust architecture in the age of AI and to institute independent permission management and security control mechanisms.