[UPDATED] Rumors about Microsoft's January 2026 layoffs "100 percent made up / speculative / wrong," says Frank Shaw

[UPDATE | 12:45 AM IST, January 8] Turns out the report claiming massive layoff in this month is fake. Folks at Windows Central have spotted a reply of Frank Shaw, Chief Communications Office at Microsoft, on a post on X that mentioned layoff rumors. He states that the rumors are “100 percent made up / speculative / wrong.” Just to be clear, the title you see now has been updated to reflect the latest information.

[ORGINIAL STORY] Last year, Microsoft created havoc across its global workforce with several rounds of job cuts, despite posting strong revenue and profits. The company slashed over 6,000 roles in May, followed by another 9,000 in July, although its net income was around $75 billion. The company was clearly trimming headcount, focusing towards efficiency and strategic growth with AI in back of its mind.

Now, according to TipRanks, Microsoft is planning another round of layoffs in January 2026. The report suggests that between 11,000 and 22,000 roles could be affected worldwide. If the numbers are accurate, it converts to roughly 5–10% of its 220,000-strong global workforce.

Teams in Azure cloud, Xbox gaming, and global sales division are most likely to be hit by this massive layoffs. As of now, Microsoft hasn’t confirmed these plans, but insiders suggest the decision has to do with long-term AI investments.

To catch you up, Microsoft obsession with AI has led it to pour in billions of dollars in AI spending. In Q1 FY26 alone, the company’s capital expenditure shot up to $34.9 billion, with the company expecting total AI-related costs to exceed $80 billion this year. Most of this money has been spent on data centers, chips, and AI tools. The report also mentions that employees working around AI inside Microsoft are relatively immune from the rumored layoffs than those working in a different department.

Adding to the job scare, a mandatory office policy requiring employees within 50 miles of an office to be on-site at least three days a week is another headache to deal with. Some employees even say that Microsoft is indirectly encouraging voluntary exits without formal layoffs.

Whatever may be the case, we are yet to hear officially from Microsoft. But, given the rampant layoffs from last year, this rumor could indeed be true.