Microsoft is planning another round of layoffs that will slash thousands of roles next week, marking the company’s third major workforce reduction in just over a year as concerns mount over out-of-control AI spending.

Less than 2.5% of the company’s 220,000-person workforce, or fewer than 5,500 workers, will be affected from the sales and consulting divisions as well as Xbox’s gaming unit, according to Business Insider. The Redmond, Washington-based software giant plans to announce the layoffs next week, just after the start of its new fiscal year on Wednesday, though the timing could change.

The cuts follow 6,000 jobs eliminated last May and another 9,000, or 4% of its workforce, cut last July. Microsoft declined to comment when reached by the New York Post.

The company has been facing dual concerns: that it is spending too much on AI infrastructure, with commitments of $190 billion over the coming years, and fears that AI bots could render traditional software tools obsolete. Shares in Microsoft tanked 19% in June for the stock’s worst month since the dot-com crash of the early 2000s.

News of additional layoffs comes after Microsoft earlier this year launched a voluntary retirement buyout round for U.S. employees whose years of employment and age add up to 70 or higher. About a third of the company’s 9,000 eligible workers took the offer, allowing Microsoft to cut fewer roles in this expected layoff round.

The gaming unit has been bracing for changes after new Xbox CEO Asha Sharma called for a “resetting” of the company, saying it was “not in a healthy spot” amid declining revenue. Xbox has spent the past two years closing studios, canceling game releases, and raising prices on its consoles as skyrocketing data center demand for chips sends component prices higher.

So far this year, nearly a third of all job cuts have hit the tech sector, and AI was the leading reason cited for announced layoffs in June for the fourth month in a row, according to a Challenger, Gray & Christmas report released Wednesday. “The pace of layoffs cooled considerably in June, similar to plans last June, and as is typical for summer months,” said Andy Challenger, the firm’s workplace expert. “That said, the cuts we are seeing remain concentrated in technology, and artificial intelligence continues to reshape how companies think about headcount,” as reported by the New York Post.