Washington has already paid $1.4 billion in unemployment benefits this year

Among the reductions are 268 positions across Xbox Game Studios, affecting Halo Studios, other first-party studios and management and operating teams within Microsoft’s gaming business.

The latest cuts are part of an ongoing restructuring of Xbox, but Microsoft said reductions outside gaming are also taking place in areas including cloud, artificial intelligence, marketing and research.

They come just over two months after Microsoft announced plans to eliminate 4,800 positions globally in July, including 605 jobs in Washington.

That means Microsoft alone has disclosed roughly 900 Washington job cuts across the two rounds since July.

The company has described the restructuring as part of an effort to control operating costs and reorganize parts of its business while continuing to invest heavily in artificial intelligence and cloud infrastructure.

Microsoft is far from the only major technology employer reducing its Washington workforce.

A series of companies with significant operations in the Seattle region have announced or disclosed cuts in recent months, including Oracle, Zillow, Amazon, Google, Salesforce, TikTok, Uber, Qualtrics and T-Mobile.

The continuing layoffs are unfolding against a Washington labor market that is showing signs of pressure, even as the state’s overall unemployment rate remains relatively stable.

Washington’s unemployment rate declined slightly from 5% in July to 4.9% in August, according to the latest data from the Washington Employment Security Department.

But beneath that headline number, private-sector employment declined by an estimated 9,000 jobs in August. Washington still had about 197,500 unemployed people actively looking for work during the month.

The state is also paying out substantial amounts in unemployment benefits.

Through the first eight months of 2026, Washington has paid approximately $1.4 billion in regular unemployment benefits.

Monthly payments totaled approximately $201.1 million in January, $187.3 million in February, $188.5 million in March, $173 million in April, $181.1 million in May, $166.6 million in June, $159 million in July and $151.2 million in August.

Nearly 60,000 people received regular unemployment benefits in August alone, with the average weekly benefit reaching $782.

The $1.4 billion represents unemployment benefits paid across Washington’s entire economy and should not be interpreted as money resulting specifically from technology-sector layoffs.

There is also a lag between companies announcing layoffs and their effect on unemployment data. Some workers receive severance, some quickly find new employment and others may not qualify for or claim unemployment benefits. Many of the most recent job reductions also occurred or were announced after the August data was collected.

That makes the state’s employment figures over the next several months particularly significant.

Microsoft’s latest cuts also illustrate a broader shift underway within some of the Seattle region’s largest technology companies.

While Microsoft continues eliminating positions in parts of its organization, it is still hiring in others. The company said 850 university hires started in August and that it hosted approximately 1,300 interns over the summer.

At Xbox, however, the restructuring is substantial. Microsoft said the division’s overhaul is now about 75% complete. The company previously announced plans to eliminate roughly 3,200 Xbox positions during its fiscal year, equivalent to about 20% of the division’s workforce.

The changes are also reshaping some of Microsoft’s best-known gaming businesses. Development of the next Halo title is moving to Activision, while other studios are being consolidated, transferred or potentially closed.

For Washington, the broader question extends beyond any single company.

Seattle and the Eastside have spent decades benefiting from the expansion of some of the world’s largest technology employers and the thousands of high-paying jobs they created.

The continuing series of layoffs raises a different question for the region: what happens when several of those companies are reducing their workforces at the same time?

For now, Washington’s statewide unemployment rate remains below 5%, and employment is still higher than it was a year ago. But with another 300 Microsoft workers joining a growing list of employees affected by technology-sector restructuring, the state’s labor market will remain closely watched heading into the final months of 2026.