Microsoft Layoffs: 6000 Workers Axed In Latest Move To Prioritize AI Growth

CNBC reported that the state of Washington said Tuesday that the tech giant would reduce its overall headcount tied to its Redmond headquarters by 1,985 people, which includes 1,510 in office. At the end of June, the company had 228,000 employees across the globe.

Microsoft layoffs impacted all company departments

The company said the layoffs would affect employees across all levels, teams and geographies. According to CNBC, the latest job cuts mark Microsoft’s largest round of layoffs in two years after eliminating 10,000 roles in 2023. A Microsoft spokesperson confirmed the latest downsizing is not related to employee performance.

“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement obtained by CNBC.

Microsoft reported higher earnings weeks before job layoffs

The job terminations come weeks after Microsoft reported strong sales and profits during the January-March quarter.

In an April earnings call, Amy Hood, Microsoft’s chief financial officer, said the company prioritized “building high-performing teams and increasing our agility by reducing layers with fewer managers,” The Associated Press reported. She also stated that the overall headcount for March was 2% higher than a year ago and had slightly decreased since the end of 2024.

The layoffs affect all areas of Microsoft’s business, which includes the popular video game platform Xbox and the career networking site Linkedin, per The Associated Press.

‘This is a day with a lot of tears’

Some workers who recently lost their jobs took to social media and shared their experiences, and one executive in particular, Scott Hanselman, opened up about having to be one of the employers to terminate his staff.

“This is the first time I’ve had to lay people off to support business goals that aren’t my own,” Hanselman, a vice president of Microsoft’s developer community, wrote on Linkedin, The Associated Press reported.

“I often have trouble separating my beliefs with the system that I participate in and am complicit in. These are people with dreams and rent and I love them and I want them to be OK.” He added, “This is a day with a lot of tears.”

Is AI taking over?

According to AP, Microsoft has invested over $80 billion this fiscal year in AI infrastructure, including data centers, though it has scaled back some projects.

The aim of the AI tools is to change the way people work, including in Microsoft’s workplaces, per The Associated Press.

In a conversation with Meta CEO Mark Zuckerberg, Microsoft CEO Satya Nadella told a crowd at a conference in Silicone Valley that “maybe 20, 30% of the code that is inside of our repos today, and some of our projects, are probably all written by software,” Forbes and Reuters reported.

Microsoft is also focused on including AI in company programs, including Microsoft 365, Azure and Dynamics365.