Microsoft has initiated its largest round of layoffs in more than two years, cutting approximately 6,000 jobs—or nearly 3% of its global workforce—as the tech giant recalibrates operations in the midst of soaring investments in artificial intelligence (AI), as per The AP.
The company filed notice with Washington state officials on Tuesday, confirming that 1,985 of the layoffs are tied to its Redmond headquarters. Many of the affected roles are in software engineering and product management. The layoffs span multiple departments and regions, though the company emphasized a particular focus on trimming layers of management to increase organizational agility.
The cuts come just weeks after Microsoft posted stronger-than-expected earnings for the January–March quarter, reporting an 18% jump in quarterly profit. Despite strong performance, the company said the job reductions are part of ongoing “organizational changes necessary to best position the company for success in a dynamic marketplace.”
Restructuring Amid AI Expansion
Microsoft has been aggressively investing in AI, with plans to spend $80 billion this fiscal year on infrastructure such as data centers to support its expanding suite of AI tools. The company is also increasingly integrating AI into its own workflows, with CEO Satya Nadella recently noting that AI now generates as much as 20–30% of the code in some internal software projects.
Microsoft, which employed 228,000 full-time workers as of June 2024, previously announced smaller performance-based layoffs in January. This latest move is the most significant since early 2023, when the company eliminated 10,000 roles amid a sector-wide slowdown following pandemic-era growth.
A Broader Tech Trend
Like many of its peers, Microsoft hired aggressively during the COVID-19 pandemic as demand for digital services surged. But with growth slowing and costs rising—including potential impacts from global tariffs and inflation—companies are being forced to reassess their workforce needs.
The layoffs affect all levels and include units such as Xbox and LinkedIn. Among the 1,985 workers laid off in Washington, around 1,500 worked on-site, while 475 were remote. Their official termination date is set for July.
Microsoft’s Chief Financial Officer, Amy Hood, said during the company’s April earnings call that the company had slightly reduced its headcount since the end of 2024, despite hiring increases over the year. She said the focus going forward is on creating “high-performing teams” and streamlining management.
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