Microsoft has confirmed another wave of job cuts, affecting approximately 9,000 employees—its largest layoff since 2023. This marks the third significant round of layoffs in recent months, reflecting ongoing restructuring within the tech giant. The latest reduction represents less than 4% of Microsoft’s global workforce.
A company spokesperson stated the decision is part of broader changes aimed at strengthening organizational structure and improving productivity. “We continue to implement changes to position our teams for success in a rapidly evolving industry,” the spokesperson said. Among the adjustments are efforts to streamline management layers and enhance operational efficiency using new technologies.
The move comes amid a broader industry trend, where many tech companies are reducing their headcounts while investing heavily in artificial intelligence (AI). Microsoft’s CEO, Satya Nadella, has been vocal about the company’s AI-first strategy. Earlier this year, he revealed that AI now contributes to 20–30% of the company’s code generation and plays a pivotal role in reshaping its workflows.
Layoffs Align with Microsoft’s AI Transition
While Microsoft hasn’t confirmed which departments will be most affected, internal reports suggest the layoffs will touch several key business units. According to industry insiders, Xbox division head Phil Spencer acknowledged in a company memo that his team would see reductions. Bloomberg previously noted that sales and gaming units were likely among the targeted groups.
This latest wave follows another round of cuts in May 2025, which affected around 7,000 employees—roughly 3% of Microsoft’s workforce at the time. As of July 2024, Microsoft reported employing about 228,000 people worldwide.
The timing of the layoffs coincides with a significant push into AI and cloud-based technologies. Microsoft continues to pour billions into AI infrastructure and has become a dominant force in enterprise cloud solutions. In its most recent quarterly report, the company posted an 18% profit increase, reaching $25.8 billion—driven largely by the success of its cloud and AI segments.
Though the company hasn’t explicitly linked the layoffs to AI, analysts note that automation and generative AI tools are increasingly being used to boost employee productivity, reduce redundancy, and shift human resources to higher-impact tasks. Microsoft’s AI copilots, embedded across products like Microsoft 365 and Azure, are transforming how internal teams operate.
Tech Industry Continues to Tighten Workforce
Microsoft is not alone in trimming its workforce. Other major players in the tech space are also scaling back. Meta and Bumble have announced staff reductions in 2025, and Amazon’s CEO Andy Jassy recently hinted that AI would eventually lead to further cuts at the e-commerce giant.
Despite a wave of layoffs across the sector, many tech firms, including Microsoft, remain profitable and continue expanding in strategic areas. Microsoft is expected to release its fiscal fourth-quarter earnings later this month, which will provide deeper insight into the company’s financial health and future plans.
While job losses are never easy, the shift reflects how companies like Microsoft are adjusting to a new tech era—one increasingly dominated by automation, cloud computing, and artificial intelligence.
