By Shubhangi Chowdhury
Microsoft is set to lay off around 9,000 employees, impacting under 4% of its global workforce. The job cuts will span across various teams, locations, and experience levels, as reported by CNBC on Wednesday.
“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said in an email.
This comes at a time when tech companies across the board are trimming their workforces. However, these layoffs come even when Microsoft keeps outperforming on the financial front. In its latest quarterly results, the company posted an 18% year-over-year jump in net income, reaching $25.8 billion.
This isn’t the first wave of cuts this year either. Microsoft laid off over 6,000 employees in May, followed by at least 300 more in June. And back in January, it trimmed less than 1% of its workforce, reportedly due to performance-based evaluations.
READ: Microsoft to shut down Skype (May 5, 2025)
Microsoft had previously let go of 10,000 employees in 2023. However, its biggest layoff to date happened in 2014, when the company cut 18,000 jobs following its acquisition of Nokia’s devices and services division.
In a memo shared Wednesday, Microsoft’s gaming chief Phil Spencer said the company is aiming to streamline its structure by cutting down the layers of management between frontline employees and senior leadership. “To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness,” said Spencer.
Other tech companies such as Meta and Bumble, have also conducted layoffs. Lately, a growing number of companies have been laying off workers as artificial intelligence begins to take over many entry-level and routine tasks.
CBS reports that new labor data shows layoffs across the U.S. have surged to their highest level since the COVID-19 pandemic disrupted the economy in 2020.
In the first half of 2025, employers announced 744,308 job cuts nationwide—the most since the first six months of 2020, when nearly 1.6 million jobs were eliminated in response to pandemic-related shutdowns, according to outplacement firm Challenger, Gray & Christmas.
Federal agencies have seen some of the deepest cuts this year, driven by cost-cutting efforts from Elon Musk’s Department of Government Efficiency. Other major sectors affected include retail, technology, media, and nonprofits.
READ: Dating platform Bumble to lay off 30% global workforce (June 26, 2025)
From customer service to basic coding and content creation, AI tools are now able to handle jobs that were once performed by junior staff. For example, IBM previously said it plans to pause hiring for roles that AI could replace, especially in areas like HR. At media outlets like Gannett, automated tools have been used to generate sports recaps and earnings reports, reducing the need for entry-level writers.
Earlier this year, Microsoft CEO Satya Nadella revealed that AI is already playing a significant role in the company’s software development process, with artificial intelligence now responsible for generating 20% to 30% of all code written.
This marks a major shift in how work is being done at Microsoft, as AI tools like GitHub Copilot become more integrated into developers’ daily workflows. At the same time, Microsoft is doubling down on its AI ambitions by investing billions of dollars into expanding its AI infrastructure, from building massive data centers to enhancing cloud capabilities largely through its deep partnership with OpenAI. These moves highlight how central AI has become to Microsoft’s future strategy across products, services, and operations.