Microsoft is laying off around 4,800 employees, approximately 2.1 percent of its workforce, with most of the job losses in its Xbox and commercial sales organizations. The company cites a changing technology industry and the need to adjust resources in response to AI’s impact. Most of the eliminated roles will not be replaced by AI, but the technology is changing how work gets done. The layoffs are part of a larger effort to reset the Xbox business, with plans to eliminate around 20 percent of Xbox jobs by the end of the financial year. Why it matters: this move highlights the significant challenges tech companies face in adapting to AI-driven changes in the industry, which will likely have far-reaching implications for the future of work.