Microsoft made the largest job cut yet in 2025 when it announced on July 2 that it would lay off about 9,000 workers, or roughly 4% of its roughly 228,000 employees. Following layoffs of almost 6,000 employees in May and 300 in June, this is Microsoft’s third significant round of layoffs this year. Employees of the Xbox division, worldwide sales teams, and other departments will be impacted by the most recent reduction, which is a part of the company’s efforts to become more effective and flexible while financing its significant investments in AI and the cloud.
Microsoft CFO Amy Hood emphasised the importance of “building high-performing teams and increasing agility by reducing layers” in the midst of a $80 billion capital spending plan for its fiscal 2025 that was centred on data centre build-outs and AI technology. As competitors like Meta, Google, and Amazon likewise reduce their workforces to counter growing AI-related expenses, this is consistent with broader industry trends.
Microsoft has described the layoffs as “organisational changes necessary to best position the company for success in a dynamic marketplace,” and affected employees have started getting notices. However, analysts caution that ongoing disruptions brought about by AI may change future employment practices and the makeup of the workforce.
