Australian Microsoft employees are expected to be affected by the company’s latest global restructure, as the technology giant moves to cut 4,800 jobs worldwide and overhaul parts of its Xbox gaming business.

The cuts represent about 2.1 per cent of Microsoft’s global workforce. Microsoft Australia employs about 3,000 people across six offices, although it is not yet known which local teams, roles or locations will be affected.

The lay-offs come as the world’s largest technology companies face growing pressure to justify massive spending on artificial intelligence, cloud infrastructure and data centres.

Big Tech’s AI investment boom is expected to top $1 trillion this year, forcing companies to show stronger returns while absorbing the cost of rolling out the technology across their businesses.

Microsoft’s chief people officer Amy Coleman told employees in a memo that “the roles eliminated today are not being replaced by AI”.

“At the same time, ​what is true is that AI is changing how work gets done,” she said.

The Australian impact follows a broader wave of technology job cuts. Amazon and Meta Platforms have also laid off thousands of workers globally this year, while local software firms have moved to reduce headcount as AI changes parts of the software development process.

In Australia, Atlassian announced earlier this year that nearly 500 local jobs would go, while WiseTech Global said it planned to cut about 2,000 roles as AI replaced manual software coding.

Microsoft’s restructure is particularly severe inside Xbox, where the company is cutting 3,200 gaming roles and immediately laying off 1,600 staff.

The company is also preparing to divest several studios as it looks to improve returns from a business that has absorbed tens of billions of dollars in investment.

Despite the major acquisition of Activision Blizzard, Microsoft has continued to trail Sony’s PlayStation and Nintendo in the console market.

The company has increasingly shifted Xbox toward a broader platform strategy, distributing games across more devices rather than relying only on console exclusives to drive hardware sales.

Xbox’s new head, Asha Sharma, said the restructure would involve spinning off several studios.

“South of Midnight producer Compulsion Games and Psychonauts maker Double Fine Productions will become independent studios, while Ninja Theory and Undead Labs will ​be spun off to grow Senua and State of Decay 3,” Sharma said.

The management of Arkane Studios, which developed Dishonored and is currently working on a game based on Marvel Comics character Blade, has also started consultations with its workers’ union in France to review options.

For Australian staff, the uncertainty now turns to where the cuts will land. Microsoft has not publicly confirmed which Australian divisions will be affected, but the global restructure shows how quickly the AI boom is changing the economics of the technology sector.

The message from Big Tech is becoming clearer: artificial intelligence may be driving record investment, but it is also forcing companies to become leaner, faster and more selective about where people fit inside the next phase of the industry.