Microsoft to Lay Off Around Three Percent of Workforce in Organisation-Wide Cuts

Roughly 6,000 jobs are being slashed at Microsoft, less than 3% of the workforce, as the tech giant starts tightening its belts. This move frees up resources for Microsoft’s great AI ambitions, where billions are flowing in a high-stake gamble on the future of AI.

Microsoft is set for the possibility of laying off workers again, probably at the biggest scale seen since approximately 10,000 were laid off earlier in 2023. These sweeping cuts will impact staff at all levels and in all geographic areas. In January, albeit in a comparatively smaller manner, performance-based cuts did take place, but sources informed CNBC that this current restructuring has nothing to do with it.

With the AI gold rush underway, Big Tech has staked a claim at a very high cost. While some companies consider AI to be the next big hyper-growth engine and pour in billions, a silent storm is brewing. The pursuit of AI is ruthless, unforgiving of inefficiency, and so focused on the bottom line that hundreds of workers have been sacked. In contrast to those who believe in the future being intelligent, they are faced with a present landscape darkened by layoffs and shifting priorities.

“To thrive in this ever-shifting landscape, Microsoft is strategically realigning its internal structure,” a company representative stated in an email.

With a workforce of 228,000 in June 2009, the company carefully manages its human resources through selective layoffs to retain only those employees who match its strategic priorities.

With a workforce comprising 228,000 employees as of June 2009, the company carefully manages its human resources through selective layoffs to retain those employees who match its strategic priorities.

Leading by gains on a very destructive day of earnings, Microsoft surged with a priority performance and surprisingly good growth in the powerhouse Azure cloud unit. It was Wall Street exhaling under economic headwinds.

Microsoft’s vision for AI is draining its pockets. That huge bet is being placed on artificial intelligence to power future innovations, an investment causing profit selection. The Cloud Business of Microsoft, usually a very good source of income, saw its margins fall from a gigantic 72% last year to a good 69% this past quarter. Would the AI rush trade off short-term gains?

$80 billion down the drain for AI by Microsoft! There’s that major chunk which, really, has gone into rejigging their data centers to clear any bottlenecks in this AI storyline. Time to unbox the warp speed!!!

With an abrupt thrust on profitability, this recent round of layoffs is suggestive of a finely tuned balancing act by Microsoft, weighed against margin erosion with regard to its tentative AI aspirations, as according to D.A. Davidson analyst Gil Luria.

“Capital investments such as those large ones undertaken by Microsoft must come with some hidden price: say a loss of 10,000 jobs per annum. These could very well be the layoffs they will have to make to cover soaring depreciation costs.”

© Thomson Reuters 2025

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