Microsoft cuts 4,800 employees in new layoffs

Summary

CNBC's Kate Rooney reports Microsoft cut 4,800 jobs, mainly in Xbox gaming, as the company reallocates resources toward AI. The layoffs mirror similar moves at Amazon, Meta, and Google to fund AI infrastructure. Microsoft's stock is the worst mega-cap performer this year, and upcoming earnings will test whether AI spending generates returns.

• Microsoft eliminates ~2% of workforce, with 20% staff cut in Xbox gaming unit.
• Restructuring aims to shift resources to AI, not directly replace roles with AI.
• Gaming revenue has shrunk while Azure cloud remains the investor focus.
• Broader trend: Amazon, Meta, Google also cutting jobs to fund AI build-out.
• Microsoft stock down ~20% YTD, worst performer among mega-cap tech.
• Earnings seen as crucial to gauge AI investment returns.
• Skepticism noted around Microsoft's own AI models gaining traction.