New York, NY – Microsoft confirmed on Wednesday that it is laying off thousands of employees in its third round of workforce reductions this year. The cuts will impact less than 4% of the company’s global workforce, affecting approximately 9,000 employees, according to a company spokesperson.
This follows a significant reduction of 10,000 jobs in 2023, marking the tech giant’s largest layoffs since then.The announcement comes amid a broader wave of downsizing in the tech industry, with companies like Meta, Bumble, and Amazon also trimming staff.
Microsoft’s stock remained steady following the news.“We are implementing organizational changes to optimize our structure and position our teams for success in a rapidly evolving market,” a Microsoft spokesperson said. The company emphasized efforts to streamline operations by reducing managerial layers and leveraging new technologies to boost employee productivity.
The layoffs coincide with Microsoft’s aggressive push into artificial intelligence (AI), which is transforming its operations. Earlier this year, CEO Satya Nadella revealed that 20% to 30% of the company’s code is now generated by AI, supported by billions invested in AI infrastructure.
While it’s unclear if AI directly triggered these cuts, the technology is reshaping workforce dynamics across the industry. Amazon CEO Andy Jassy recently noted that AI could lead to further headcount reductions at his company as well.
Details on which Microsoft divisions will be affected remain limited. However, The Verge reported that Xbox leader Phil Spencer informed his team of impacts, and Bloomberg previously indicated that the sales and Xbox divisions were likely targets. This follows a May 2025 reduction of 3%, or roughly 7,000 employees, bringing Microsoft’s cumulative layoffs this year to over 16,000.
As of July 2024, Microsoft employed 228,000 workers worldwide. The company reported an 18% profit increase to $25.8 billion for the quarter ending March 31, driven by its cloud business and AI services. Microsoft is set to release its fiscal fourth-quarter earnings later this month, which may provide further insight into its financial and strategic direction.
The layoffs reflect a broader trend in the tech sector, where companies are balancing cost-cutting with investments in AI and other emerging technologies to stay competitive in a dynamic market.
