Microsoft is preparing to cut about 5,500 jobs in another round of layoffs as it continues to shift billions of dollars toward artificial intelligence (AI), with the expected move also rekindling debate over the company’s use of the H1-B visa program.According to Business Insider, the company may announce layoffs as early as next week. The planned cuts are expected to affect less than 2.5 percent of Microsoft’s global workforce. Based on a workforce of about 228,000 as of June 30, that would be about 5,500 jobs.The cuts are expected to take place across multiple business units, including sales, consulting, and the Xbox gaming division. A person familiar with the plans told Business Insider that some affected employees may be offered alternative roles within Microsoft after the announcement.The move follows a previous round of job cuts. Microsoft laid off about 6,000 employees before announcing another cut of about 9,000 jobs in July 2025, representing about 4 percent of its workforce. The round is expected to be shortened after many eligible US workers accepted the voluntary retirement program launched earlier this year. The retirement plan was offered to level 67 and below employees who met the company’s age and service requirements. Sales employees on commission-based pay were not eligible.Microsoft traditionally reviews its workforce at the beginning of the new financial year. Additionally, it has continued to increase spending on AI and cloud infrastructure. The company invested more than $100 billion in AI and cloud projects through the 2026 fiscal year, with most of the spending focused on AI chips and related infrastructure.The Xbox division is also expected to undergo a significant restructuring after years of heavy investment in gaming content, hardware, and platforms. Earlier this year, Xbox Gaming CEO Asha Sharma told employees that the business needed a “reset.”The expected job cuts have also revived criticism of Microsoft’s continued hiring of foreign workers through the H1-B visa program.A viral post onThe post reads: “Microsoft has been the sixth-largest H-1B filer in the country since 2020, bringing in foreign workers year after year despite cutting U.S. jobs. A few months ago, it quietly put pressure on older U.S. workers. Nearly a third of the 9,000 eligible moved out. This round is on top of that. LinkedIn, which is wholly owned by Microsoft, cut 875 jobs this year, nearly half of its workforce. 5%, even with revenue growth of 12% and they continued filing H-1B applications. Xbox has been hit the hardest. Under new CEO Asha Sharma’s ‘reset’, its layoffs will reportedly be the largest single layoff in gaming history. Record profits, and still one of the top H-1B sponsors in the US. Thousands of American jobs were lost.”Meta has announced plans to cut its workforce by about 10 percent this year, while Amazon has said it will eliminate about 16,000 jobs globally. Industry data also shows that technology companies in the US have announced to cut more than 123,000 jobs in 2026, with increased investment in AI cited as a major reason behind many of the cuts.