Microsoft is set to lay off 4,800 workers, around 2.1 percent of its workforce.Gaming division Xbox was among the worst hit, but cuts came across the entire business, particularly with sales teams.Microsoft Cloud employees were caught up in the layoffs, while others recently left as part of a voluntary retirement program that was offered to about seven percent of its US workforce.Around 1,600 workers will be laid off at Xbox this year, with another 1,600 expected next year. Game studios Compulsion Games and Double Fine Productions will be spun out as independent businesses, while Ninja Theory and Undead Labs have entered into terms to join new ownership with funding."I also want to be direct that the roles eliminated today are not being replaced by AI," chief people officer Amy Coleman said in a memo to staff."At the same time, what is true is that ​AI is changing how work gets done."Microsoft is set to report its quarterly earnings later this month. In April, it forecast Azure sales above analyst estimates, but also warned of a $190 billion annual capital expenditure cost.The majority of that record spend is set to go to AI data centers, chips, and memory.