Microsoft is preparing to cut under 2.5% of its workforce as early as next week while SAP SE said it will restrict hiring to core artificial intelligence roles and pause internal travel unrelated to AI development, according to separate reports.
The Microsoft cuts would affect thousands of roles, including positions in sales, consulting, and Microsoft's Xbox gaming division, according to the Business Insider.
Microsoft reported roughly 228,000 full-time employees as of June 30, 2025, in a filing with the U.S. Securities and Exchange Commission.
Bloomberg has separately reported that Microsoft's Xbox division is planning major layoffs and marketing cuts amid a global components shortage, while The Information has reported the company is weighing options for the unit, including a possible spinoff.
In a move that has no precedent in the company's 51-year history, Microsoft in April offered voluntary retirement buyouts to a segment of its American workforce.
In late 2025, Microsoft CEO Satya Nadella said the tech giant will grow its headcount despite laying off thousands of employees earlier that year.
SAP restricts hiring and travel
Meanwhile, SAP's executive board told staff in a memo Wednesday evening that the company would "exclusively focus new hiring on selected profiles only, mainly core AI roles, that are critical for our long-term success," Bloomberg reported.
Travel for internal events unrelated to AI development will also be paused, and the company said it would look for ways to cut spending with suppliers.
The board framed the changes as part of a broader reallocation of resources rather than a straightforward cost-cutting measure.
"As AI reshapes the future of our industry, we are making significant investments in the products and AI capabilities we build, complemented by strategic acquisitions in data and AI where we need additional expertise and technology," the memo said, according to Bloomberg.
SAP shares have fallen roughly 32% this year, a decline Bloomberg linked partly to competition from fast-growing AI firms, including Anthropic PBC.
Bloomberg also reported that SAP recently lost out on talks to acquire industrial AI firm Cognite, which instead agreed to a $3.1 billion deal with Schneider Electric SE.
