In a major move signaling its strategic realignment, Microsoft has announced the layoff of 9,000 employees—approximately 4% of its global workforce of 228,000. This marks the company’s largest job cut in more than two years. The layoffs are part of a broader restructuring effort driven by a massive $80 billion investment in artificial intelligence (AI) and cloud infrastructure.
The latest cuts bring Microsoft’s total layoffs in 2025 to over 15,000, including the 6,000 job reductions that occurred in May and several smaller workforce adjustments earlier this year. The company is pursuing a strategy to streamline its operations, flatten management layers, and redeploy resources toward emerging technologies, especially AI.
According to an internal memo obtained by Business Insider and confirmed by The Verge, the layoffs affect multiple departments across the company, including engineering, sales, and product teams. While specific teams have not been officially disclosed, insiders suggest that overlapping roles and positions less aligned with Microsoft’s AI and cloud roadmap were prioritized for cuts.
A Microsoft spokesperson commented, “Organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize strategic growth areas, especially AI and cloud, to better serve our customers and partners.”
The decision aligns with CEO Satya Nadella’s ongoing vision of transforming Microsoft into an AI-first company. Earlier this year, the tech giant committed to investing $80 billion into expanding AI capabilities and upgrading global data center infrastructure, including partnerships with OpenAI and new data hubs in the U.S., Europe, and India.
Experts say the layoffs are part of a broader industry trend. Tech giants including Amazon, Meta, and Google have also implemented layoffs in 2024 and 2025, citing the need to optimize costs while investing heavily in AI innovations.
“This is not just a Microsoft story—it’s the story of tech transformation,” said Dan Ives, a tech analyst at Wedbush Securities. “Legacy roles are being phased out while AI-related skills are becoming the new currency in tech employment.”
While some employees have expressed disappointment and frustration on professional platforms like LinkedIn and Blind, others acknowledge the shift is inevitable as the tech industry evolves. Microsoft has pledged to provide severance benefits, outplacement support, and career transition services to all affected workers.
Notably, this round of layoffs follows an earlier announcement by Microsoft that it would pause hiring in non-strategic divisions, increase automation in business operations, and reshape its organizational structure to eliminate redundant management layers.
As Microsoft repositions itself for the AI-powered future, these changes underline the shifting priorities of one of the world’s most influential tech firms.
Sources:
- The Verge: https://www.theverge.com
- Business Insider: https://www.businessinsider.com
- CNBC Tech: https://www.cnbc.com/technology/
