Microsoft axes nearly 5K jobs

PLUS: The anti-Meta smart glasses just became a unicorn

Jennifer Mossalgue

July 7, 2026

Good morning, tech enthusiasts. Microsoft axed 4,800 jobs on Monday, and two-thirds of those belong to Xbox — where new CEO Asha Sharma just delivered the bluntest memo in the division’s 25-year history.

“Our business today is not healthy,” she told staff, before detailing 3,200 cuts and five studios heading for the exits. The retreat comes less than three years after Microsoft closed its $69B Activision Blizzard deal — still the largest gaming acquisition ever made.

In today’s tech rundown:

Microsoft axes 4,800 jobs, and Xbox takes the hit
The anti-Meta smart glasses just became a unicorn
Alibaba fights the U.S. blacklist, and wins round one
Big Tech drastically undercounts AI’s water use
Quick hits on other tech news

LATEST DEVELOPMENTS

MICROSOFT

🪓 Microsoft axes 4,800 jobs, and Xbox takes the hit

Image source: Images 2.0 / The Rundown

The Rundown: Microsoft axed 4,800 jobs Monday — 2.1% of its global workforce — with two-thirds of the pain landing on Xbox, where new CEO Asha Sharma is orchestrating what she calls the most significant restructuring in the division’s history.

The details:

The gaming division sheds 3,200 roles — about 20% of its staff — by mid-2027, with 1,600 cut Monday and the rest staggered across the fiscal year.
Five studios are out: Double Fine and Compulsion go independent, Ninja Theory and Undead Labs head to buyers, and Arkane enters review.
Sharma’s memo is unsparing: Xbox runs at margins 3–10x lower than comparable businesses and lost 64 cents per dollar invested in studios.
The cuts land as Microsoft is last among megacap tech stocks, down 19%, with investors fretting that AI could eat into its enterprise software business.

Why it matters: This is Microsoft conceding that its buy-everything gaming era — capped by the $69B Activision Blizzard deal — built an empire too bloated to compete on margin. After a decade of acquiring studios, Xbox’s new growth plan is letting them go.

EVEN REALITIES

🦄 The anti-Meta smart glasses just became a unicorn

Image source: Even Realities

The Rundown: Shenzhen startup Even Realities just raised $150M at a $1B valuation — a bet, led by Meituan and Tencent, that the future of smart glasses doesn’t include a camera.

The details:

The pre-Series B round adds delivery giant Meituan to a backer list that already includes Tencent, Hillhouse, Sequoia China, and Northern Light Venture Capital.
Founded in 2023 by ex-Apple engineers, the company’s G2 glasses pair a heads-up display with a tap-and-swipe companion ring; no camera included.
Real-time translation transcribes audio to text instead of storing recordings, data is encrypted, and the stack is built to clear Europe’s privacy bar.
Even claims profitability at a premium price — $599 frames, roughly $1K average orders — with the U.S. as its fastest-growing market.

Why it matters: While Meta and Snap race to put cameras and AI assistants onto everyone’s face, Even Realities wants to prove there is a real market for glasses that show you things without watching anyone. If a three-year-old startup can hit profitability selling privacy as a feature, the smart glasses race just found its contrarian.

ALIBABA

🛑 Alibaba fights the U.S. blacklist, and wins round one

Image source: Long Wei / VCG via Getty Images

The Rundown: A federal judge just ordered the Pentagon to stop treating Alibaba as a Chinese military company — at least where a new lobbying ban is concerned — while the court weighs whether the restriction violates the Constitution.

The details:

The Pentagon added Alibaba to its 1260H list of alleged Chinese military companies in June, expanding the roster to include 188 firms in total.
A provision bars the DoD from contracting with any company whose lobbyists also represent a listed firm, and Alibaba says all of its 20-plus lobbyists withdrew within a week.
Alibaba sued on June 23 seeking removal from the list, arguing it doesn’t work with the Chinese military.
Judge Eumi K. Lee’s order holds until she rules on Alibaba’s motion or 60 days after a hearing — and the Pentagon agreed to the temporary pause.

Why it matters: A 1260H listing carries no automatic penalties, but the new lobbying rule gave it real consequences — no major firm will represent a listed company if it costs them their defense clients. With Baidu and BYD disputing their designations too, the blacklist now faces its first constitutional test.

AI

💧 Big Tech drastically undercounts AI’s water use

Image source: Google

The Rundown: Microsoft, Google, and Amazon consume far more water than they report — because most of it evaporates upstream, at the power plants running their data centers, according to the Wall Street Journal.

The details:

Hyperscalers report only on-site cooling water; among the big four, only Meta also counts the water consumed at the power plants supplying its electricity.
The omission is huge: U.S. data centers’ indirect water use has historically run ~12x their direct consumption, per Lawrence Berkeley National Laboratory.
In water-stressed Phoenix, data centers draw ~3% of city water today — a share Ceres projects could top 20% by 2031.
Community pushback is mounting, with $170B in data-center capacity blocked, stalled, or canceled since 2024, per Carbon Direct.

Why it matters: The real footprint is roughly 12x what shows up in sustainability reports, per WSJ — and no one is required to disclose it. With hyperscalers racing to build in water-stressed markets, communities are being asked to share their scarcest resource based on numbers that dramatically undersell the ask.

QUICK HITS

📰 Everything else in tech today

A Texas DoorDash driver was charged with manslaughter after overriding his Tesla’s FSD by flooring the accelerator, killing a woman inside her home.

Uber has paused its Uber Eats expansion into five European markets where Delivery Hero operates, fueling speculation it wants to buy the German giant.

Micron just broke ground on a $9.3B expansion of its Hiroshima plant to churn out the HBM chips feeding Nvidia’s AI processors, backed by up to $3.2B in Japanese government subsidies.

Bentley just teased the Torcal, its first-ever EV — a fastback-style electric SUV that gets its full reveal in London on September 23.

Klarna has applied for a Utah bank charter to launch Klarna Bank USA, a move that would let the BNPL giant become a full-fledged U.S. consumer bank.

Tesla is now taking U.S. orders for the Model Y Long Wheelbase starting at $61,990, nearly a year after its China debut, with deliveries slated for September.

Broadcom said it will expand its deal with Apple through 2031 to develop and supply custom chips, calming investor fears of Apple designing Broadcom out of its devices.

COMMUNITY