Recently Microsoft has been laying off 9,000 to 9,100 employees which makes up about 4% of its workforce. The company celebrated its 50th anniversary three months before and now has issued a notification on 2 July 2025 with the end of Microsoft’s fiscal year.
According to Reuters, Microsoft is said to have fewer managers and reduce organizational layers. This cut ranges from software engineers to gaming and sales. It will affect employees of different teams.
The Xbox division faced game cancellations and studio closures in this layoff. It also affected the sales and marketing area.
Company’s Message via CNBC
Microsoft stated that these changes were important to position the company for success in dynamic marketing and said that they continue to implement organizational changes necessary to best position the company, A Microsoft spokesperson said, CNBC, the Associated Press, and the Seattle Times. Microsoft sent layoff notices to employees on Wednesday according to the AP and cut roughly 9,000 employees according to CNBC.
What might be causing the Microsoft layoff?
Microsoft is trimming its workforce because it desires to cut costs as it is investing heavily in artificial intelligence according to Reuters. Microsoft pledged 80 billion dollars earmarked for artificial intelligence in FY 2025. Reuters reported that the increasing cost of AI infrastructure may have created margin pressure with its June quarter expected to shrink from last year.
Other big companies also decided to lay off their workers after investing a heavy amount in artificial intelligence. Google has laid off hundreds of employees in the past year and Facebook parent Meta has also stated to lay off 5% of its lowest-performing employees.
Microsoft’s previous rounds of layoffs
In the historical context of previous layoffs at Micro soft, in January Tech Detour reported that Microsoft had cut less than 1% of its workers based on their performance.
The Microsoft spokesperson said to the CBNC that “We focus on high-performance talent”. Consequently, he said that they are working to help people grow and learn, and when people are not giving the desired performance they take action.
In 2023 there were 10,000 global layoffs and in 2014 following the services business and the acquisition of Nokia’s device, the company eliminated 18,000 employees.
According to its website and the most recent data from June 2024, Microsoft employs 228,000 workers globally. It takes roughly 120,000 workers from the U.S and 108,000 internationally.
