Microsoft is laying off 4,800 workers: ‘AI is changing how work gets done’
A logo sits outside the Microsoft pavilion during the second day of the Mobile World Congress 2015 at the Fira Gran Via complex on March 3, 2015 in Barcelona, Spain. (David Ramos/Getty Images)
(NEW YORK) — Microsoft said on Monday it will lay off 4,800 employees and that the job cuts would be especially pronounced in its Xbox department.
The layoffs will affect 2.1% of Microsoft’s global workforce, Amy Coleman, executive vice president and chief people officer, said in a public memo to employees.
Coleman attributed the layoffs in part to a shakeup in the tech sector wrought by artificial intelligence. None of the terminated roles will be replaced by AI, Coleman noted. At the same time, she acknowledged: “AI is changing how work gets done.”
“Our business is changing because the world around it is changing. The way technology is built, deployed, and used is transforming faster than at any point in my time here,” Coleman said.
In a separate statement, Microsoft said a large share of the job cuts would impact its Xbox department, which oversees the company’s popular video game console.
In all, Xbox would slash 1,600 jobs as part of the layoffs announced on Monday, as well as an additional 1,600 cuts through the end of fiscal year 2027, Xbox CEO Asha Sharma said in a public memo to employees.
“We are beginning the most significant restructure in XBOX history,” Sharma said, adding, “Our business today is not healthy.”
Sharma pointed to weaker-than-expected performance for Xbox’s subscription service, Game Pass, which charges a monthly fee for access to a collection of games. The company faced stiff competition in its efforts to increase output of new games, Sharma added.
“We now find ourselves competing not only with the largest publishers, but also with smaller independent studios,” Sharma said.
Xbox will not cancel any of its first-party, publicly announced games or projects as part of the new plans, Sharma said.
Shares of Microsoft fell about 1% in early trading on Monday.
Photo taken on Aug. 12, 2024 shows the trading floor of the New York Stock Exchange NYSE in New York, the United States. (Liu Yanan/Xinhua via Getty Images)
(NEW YORK) — The Dow Jones Industrial average soared more than 1,000 points on Monday after President Donald Trump claimed “productive conversations” had been held between the U.S. and Iran.
The major stock indexes shed some of the morning’s gains by midday as a flurry of headlines about the Middle East conflict appeared to elicit volatile price fluctuations.
The peace talks — which Iranian officials denied — sent the price of oil plunging on Monday on hopes that negotiations could reopen the Strait of Hormuz and end a weeks-long global energy shock.
The Dow surged 700 points or 1.5%, while the S&P 500 jumped 1.2%. The tech-heavy Nasdaq increased 1.3%.
This is a developing story. Please check back for updates.
An aerial view of the New York Stock Exchange’s trading floor. Since the installation of the Hybrid Market system in 2007, there has been less traders on the floor due to an increase of electronically done trades and transactions. (xPACIFICA/Gety)
(NEW YORK) — The Dow Jones Industrial Average on Thursday crossed above 50,000, shrugging off a renewed bout of inflation and an apparent impasse in negotiations over the Iran war.
The rise in shares came as President Donald Trump visited Chinese President Xi Jinping in a high-stakes summit between the leaders of the world’s two largest economies.
The Dow climbed 370 points, or 0.7%, while the S&P 500 jumped 0.3% and the tech-heavy Nasdaq increased 0.1%. The Dow first topped 50,000 in February.
A group of corporate executives joined Trump on the trip, including Tesla CEO Elon Musk, Nvidia CEO Jensen Huang and Apple CEO Tim Cook.
After a dramatic welcoming ceremony, Trump sat down with Xi on the first day of a multi-day summit, during which Trump said he’d seek to deepen diplomatic and economic ties.
The trip came at a crucial time for Trump as the war with Iran drove up prices for Americans at home due in large part due to Iran’s effective closure of the Strait of Hormuz. China is Iran’s principal oil consumer.
Inflation rose for a second consecutive month as the war continued to send gasoline prices surging in April, government data this week showed.
Annual inflation jumped to its highest level in three years, according to the U.S. Bureau of Labor Statistics.
Sunny investor attitudes stem from robust corporate earnings, as well as milder economic fallout from the war than some forecasters feared, some analysts previously told ABC News.
Trump, they added, has displayed a willingness to back off of actions if they threaten a severe market reaction, reassuring investors wary of a prolonged conflict.
Despite the disruption, some measures of economic health have proven resilient.
Hiring slowed in April but remained solid, exceeding economists’ expectations, government data last week showed. The unemployment rate held steady at 4.3% in April, a low level by historic standards.
Additionally, the economy grew at an annualized rate of 2% in the first quarter of 2026, marking an acceleration from 0.5% growth recorded in the previous quarter.
ABC News’ Kevin Shalvey and Jon Haworth contributed to this report.
This is a developing story. Please check back for updates.
Ships are anchored along the shoreline of the Persian Gulf and Strait of Hormuz, April 22, 2026 in Bandar Abbas, Iran. (Getty Images)
(NEW YORK) — Thousands of canceled flights in Europe over a spike in jet fuel prices. An energy emergency declaration in the Philippines. A two-week school holiday in Pakistan to conserve fuel used by commuters.
The U.S.-Israeli war with Iran triggered dramatic steps in a slew of countries bent on weathering one of the worst oil shocks in history, stoking concern by some about a possible global recession.
Economists disagree about whether the standoff in the Strait of Hormuz will ultimately drive the world’s economy into a downturn, in part because the duration of the waterway’s effective closure remains murky. The outcome holds implications for the livelihoods of billions of people and the performance of companies big and small across the globe.
Some analysts said they fear the oil shortage will soon become so dire that crude prices could rise sharply driving up costs for an array of goods and hammering shoppers. The fallout could squeeze businesses and shrink growth, they said.
Others proved more optimistic, pointing to a smaller rise in oil prices than some feared and a recent track record of economic resilience in the face of trade wars and other turmoil. A worldwide downturn, they said, would require a much more prolonged closure of the strait.
“The longer this drags on, the costlier it becomes,” Ryan Sweet, chief global economist at Oxford Economics, told ABC News.
Still, Sweet added: “Whether or not this will cause a global recession, it’s premature to say.”
The conflict, which began on Feb. 28, prompted Iran’s effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the global supply of oil and natural gas.
The vast majority of oil that passes through the strait is bound for Asian markets. But since oil prices are set on a global market, prices have climbed for just about everyone as buyers chase fewer barrels of crude.
On Tuesday, Trump extended a ceasefire with Iran, averting a resumption of wide hostilities, although the move left the strait under Iran’s effective control. The U.S., meanwhile, has mounted a blockade of Iranian ports in the strait, squeezing a key source of government funds derived from oil exports, while exacerbating the global petroleum shortage.
The Brent futures price, the benchmark index for global oil trading, registered at about $106 a barrel on Friday. That price stood about 50% higher than its pre-war level.
Higher oil and gasoline prices risk a pinch at the pump, as well as additional costs for just about every product delivered across the globe on trucks or ships that run on diesel fuel.
“Oil feeds into inflation, which reduces raw purchasing power — how much bang for their buck people have,” Sweet said. “That slows the economy.”
Still, oil prices remain below the highs reached after some previous economic shocks. In 2022, the price of Brent crude surged above $139 per barrel in March, just weeks after the Russian invasion of Ukraine. During the 2008 financial crisis, U.S. gasoline prices shot up as high as $147 a barrel.
Some economic forecasts issued in recent weeks projected that global economic growth could escape the crisis relatively unscathed, as long as the war reaches a resolution in short order and oil prices avoid a steeper climb.
The Organisation for Economic Co-operation and Development (OECD) last month predicted that global gross domestic product (GDP) growth would “remain broadly stable” at 2.9% in 2026. That forecast matched projections issued by the OECD in December, before the war.
The OECD touted strong tech investment and lower-than-expected tariffs, citing “carry-over from robust outcomes in 2025.”
Earlier this month, the International Monetary Fund (IMF) projected that GDP growth would register at a solid pace of 3.1% in 2026, noting that the global economy had withstood “higher trade barriers and elevated uncertainty last year.”
The forecasts from the OECD and IMF worked under the assumption of a resolution to the conflict by the middle of this year, acknowledging the impact could worsen if it stretches on for longer.
Some economists, by contrast, consider the economic threat a more urgent risk.
Paul Krugman, an economics professor at the City University of New York Graduate Center and a former columnist at the New York Times, criticized the IMF projection on Substack on Monday, faulting the group for “seriously underestimating how badly the global economy could be hit.”
“In my view, a full-on global recession is more likely than not if the Strait remains closed for, say, another three months, which seems all too possible,” he said.
Rosier forecasts fail to adequately factor in the risk of a significant rise in oil prices over the near term, Krugman said, warning of widespread “demand destruction” as oil becomes increasingly scarce. Under such a scenario, a surge in oil prices would make it unaffordable for many buyers, forcing them to find alternatives or forgo energy use altogether.
Technical definitions vary about what constitutes a global recession, but the gist is a period of sluggish or negative economic growth. For the World Bank, a global recession amounts to a contraction in global per capita GDP; while the IMF considers GDP growth below 2% sufficient to warrant the label of a recession.
A six-month impasse in the strait could push global oil prices as high as $190 in August, Oxford Economics said in a blog post last month. That price shock would send global inflation to 7.7%, near its peak in 2022, the independent economic advisory firm said.
“But unlike 2022, when the global economy kept growing through the price shock, the severity of this disruption tips the world into outright contraction,” Oxford Economics added.
In addition to its optimistic baseline projection, the IMF issued a downbeat prediction in the event of a more severe disruption of oil markets that stretches into next year. Under those circumstances, the global economy “would come close to experiencing a recession,” the IMF said, noting that it defines a global recession as annual GDP growth below 2%.
Growth below 2% has happened four times since 1980, the group said.
Across the board, economists acknowledged a high degree of uncertainty as the Iran war unfolds. Plus, some said, the negative effects will be unevenly distributed, hitting harder in low-income countries as well as those who depend on oil that passes through the strait.
While the full extent of economic wreckage remains unknown, the prospect of an extended global impact is all but certain, Sweet said.
“This will take a long time to get back up to resembling anything close to normal,” he added.
