Microsoft Massive Layoffs | Rewire News Daily

Microsoft to Lay Off 4,800 Employees, Xbox CEO Describes Business as "Unhealthy". On the same day, Strategy completes its largest Bitcoin sell-off in six years, putting pressure on its leveraged structure.

1｜Microsoft to Lay Off 4,800 Employees, Xbox CEO Calls Business "Unhealthy" and Initiates Comprehensive Restructuring

Microsoft has announced a workforce reduction of about 4,800 employees, representing 2.1% of its global workforce. Of these, 1,600 are from the Xbox gaming division, with a total estimated Xbox workforce reduction of 3,200 employees within the year, accounting for approximately 20% of the gaming division. The jobs of four previously acquired studios will be divested, while Double Fine and Compulsion Games will retain their own IP.

Xbox CEO Asha Sharma stated in an internal memo, "Our business today is unhealthy," highlighting a surge in console component costs and Xbox profit margins 3 to 10 times lower than similar platforms. Microsoft's Chief People Officer, Amy Coleman, emphasized that the eliminated positions will not be replaced by AI. In May of this year, Microsoft had offered voluntary buyouts to around 8,750 employees, with over 30% accepting.

Sharma used the term "reset" to define this restructuring. In 2022, Microsoft acquired Activision Blizzard for $68.7 billion, but the integration model has yet to prove successful. Xbox is transitioning from a hardware platform to content licensing, which means that the company spent the most in history on a game acquisition only to end up with a business model that needs a complete overhaul.

(Source: Fortune / CNBC / GeekWire / NBC News)

2｜NVIDIA Delays Kyber Rack to 2028, AI Infrastructure Bottleneck Shifts from Chip to System Manufacturing

According to a report by SemiAnalysis, NVIDIA's Kyber NVL144 rack system designed for the Rubin Ultra chip is delayed by over 12 months to 2028. The reason is the subpar yield in the 78-layer PCB manufacturing. The NVL72x2 back-to-back rack scheme has been canceled due to opposition from large-scale customers. NVIDIA responded by saying, "The roadmap remains intact."

Simultaneously, SemiAnalysis revealed that the AI infrastructure financing model is shifting from large-scale cloud operators' internal cash flows to GPU-backed debt financing. NVIDIA has begun offering GPU-backed debt guarantees for AI infrastructure, transforming GPUs from computational tools into financial collateral.

The most powerful NVIDIA AI system is being held back by a circuit board, not a chip. The bottleneck in AI infrastructure is shifting from design capabilities to system-level manufacturing capabilities. As hedge funds continue to sell off chip stocks for the fourth consecutive week and Morgan Stanley advises funds to shift towards mega-scale cloud players like Microsoft and Amazon, the market is also reevaluating the winners and losers in this supply chain.

（Source: SemiAnalysis / CNBC / Tom's Hardware / Goldman Sachs / Morgan Stanley）

3｜Anthropic Discovers Claude's Internal "Consciousness" Structure, Simultaneously Triggers Trust Crisis by Secretly Tracking Chinese Users

Anthropic releases the research paper "Global Workspace in Language Models," revealing that Claude internally spontaneously formed a neural workspace (J-space). The research team identified through a Jacobian lens (J-lens) that the functional characteristics of this space closely resemble neuroscientist Baars' global workspace theory: the brain broadcasts a small amount of information to the entire brain through a "spotlight," creating a conscious experience.

Anthropic emphasizes that this is not claiming Claude has subjective experience but rather a functional "access consciousness."

Almost simultaneously, Anthropic was exposed for embedding steganographic tracking code in the Claude Code to track Chinese users. The code detected the "Asia/Shanghai" time zone, scanned proxy URLs of 147 Chinese institutions, and marked users with invisible Unicode characters. Alibaba has banned the use of the Claude Code by its employees. Anthropic stated this was an experiment to prevent resale abuse, and the code was removed on July 1.

A security-focused AI company, which announced the discovery of a consciousness-like structure internally in its model, was caught secretly tracking users from a specific country. The former increased the public awe of AI capabilities, while the latter weakened trust in the intentions of AI companies.

（Source: Anthropic / VentureBeat / Axios / Ars Technica / The Register）

4｜Strategy Completes Largest-Ever Bitcoin Sell-Off of $216 Million, Leverage Narrative Meets Reality

Strategy (formerly MicroStrategy) disclosed that it sold off 3,588 bitcoins in two batches last week, totaling approximately $216 million. From June 29 to 30, 1,363 bitcoins were sold at an average price of $59,256, and from July 1 to 5, 2,225 bitcoins were sold at an average price of $60,773. This was the largest single sell-off since the company started accumulating coins in 2020 and only the third time they have sold. The purpose of the sale was to support preferred stock obligations and bolster cash reserves.

Strategy currently holds 843,775 bitcoins. The company's stock price fell approximately 5% after the news was announced. A Cantor Fitzgerald analyst noted that STRC needed to return to par value to rebuild market confidence. The company also reported about $8.3 billion in unrealized losses during the same period.

Saylor spent six years building the "Never Sell" Bitcoin treasury narrative. The significance of this sell-off lies not in its scale, but in the reason for the forced sale: when preferred stock dividends required cash flow and the company continued to operate at a loss, the "Diamond Hands" narrative was pierced by the capital structure itself.

(Source: Fortune / CoinDesk / Bloomberg / The Defiant)

5｜Trump Accounts Launch as President Rings Opening Bells of Two Exchanges from Oval Office

Trump simultaneously rang the opening bells of the New York Stock Exchange and the Nasdaq from the Oval Office, a first in U.S. history. The ceremony marked the official launch of Trump Accounts: tax-free investment accounts for children under 18, with babies born between 2025 and 2028 eligible for a one-time $1,000 Treasury Department grant. The Dell family pledged over $6 billion in donations, while SpaceX President Gwynne Shotwell announced a donation of SpaceX shares to over 2 million accounts.

On another front, Senator Adam Schiff and other Democrats accused Trump of "openly exploiting the presidential position for profit." The controversy revolves around the Trump family's reported cryptocurrency-related income of up to $1.4 billion. The Clarity Act, aimed at providing a regulatory framework for the crypto market, is now at risk of stalling due to this bipartisan showdown.

An incumbent president launching a retail investment product bearing his own name while facing conflict of interest allegations over personal crypto income. Trump Accounts serve as a policy tool, while crypto income represents private interests. Both under the same brand name, the boundary between public initiatives and personal profit has become a new battleground.

(Source: CNBC / CNN / The Hill / Fortune / The Block)

Also Worth Knowing ↓

Broadcom and Apple extend chip collaboration until 2031. The two companies will collaborate on developing custom ASIC chips for multiple generations of Apple products. Apple accounts for approximately 20% of Broadcom's annual revenue, and the agreement provides both parties with a 5-year visible supply and revenue outlook. Broadcom's stock price surged 5% intraday.

Samsung sees Q2 operating profit skyrocket 19-fold year-on-year to 89.4 trillion South Korean won ($58.4 billion). Surpassing the total profits for the years 2023 to 2025. Overflowing demand for AI storage, with DRAM and NAND prices rising by 44% and 53% respectively on a quarter-on-quarter basis. HBM capacity expansion is squeezing traditional memory supply in the opposite direction, driving up prices across the board.

Huawei plans to enter the South Korean AI chip market in Q4 with Atlas SuperPods. Each SuperPod contains 8192 Ascend 950 accelerators, claiming an inference performance 2.87 times that of NVIDIA's H20 at one-fourth the price. They have partnered with SK Shieldus and Hansol PNS as local distributors. This marks Huawei's AI chip's first formal entry into a US ally market. (Source: Tom's Hardware / TrendForce)

Hedge funds have been selling off chip stocks for the fourth consecutive week, with Morgan Stanley stating that AI funds will shift towards hyperscale cloud players. The SOX index fell by 4.2% in one week. Morgan Stanley recommends Microsoft, Amazon, and Meta, believing that the AI boom is transitioning from "shovel seller" to "shovel user." (Source: Goldman Sachs / Morgan Stanley / Reuters)

Solstice (a Honeywell spin-off) acquires Element Solutions for $14.5 billion. The deal targets specialty chemicals in the AI supply chain, bolstering Solstice's presence in semiconductor packaging and advanced materials. (Source: Reuters)

The Japanese yen falls to 162.30 against the US dollar, hitting a 40-year low. The continuous rise in Japanese government bond yields coupled with a narrowing central bank policy space is exerting debt pressure and impacting the exchange rate. (Source: Bloomberg)

AI recruitment platform Mercor surpasses $2 billion in annual total revenue. The Information's exclusive report highlights its remarkable growth rate. Mercor leverages AI to match employers with global freelancers, reshaping the white-collar labor market intermediary model. (Source: The Information)

Klarna applies for a banking license with US regulatory authorities. Transitioning from Buy Now, Pay Later (BNPL) to a full-service banking provider, Klarna aims to enhance its regulatory foundation ahead of an IPO. (Source: Finextra)

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