technology

Microsoft Lays Off 9,000 Employees, Focuses On Cutting Costs And Investing In AI

Microsoft Corp. is laying off around 9,000 employees in its second wave this year. The layoffs are in line with the company's efforts to reduce costs amid increased investment in the artificial intelligence (AI) sector. A company spokesperson said the move will impact less than 4% of Microsoft's global workforce. The layoffs will be carried out across teams, regions, and job levels as part of an effort to streamline processes and reduce layers of management. "We continue to make the necessary organizational adjustments to best position our company and teams to succeed in a dynamic market," the spokesperson was quoted as saying by Bloomberg, Thursday (3/7/2025). Previously, Microsoft was reported to be planning mass layoffs in July, which would target sales and other divisions including Xbox. This wave of layoffs follows previous layoffs in May that affected 6,000 employees, mainly in product and engineering positions. 

In the technology industry at large, companies are grappling with soaring costs to stay relevant in the global AI competition. The costs include large language model (LLM) training, data center construction, and AI-based application development. Microsoft itself has poured tens of billions of dollars into data center and AI technology development, and has promised investors to control spending going forward. 

According to Bloomberg Intelligence analyst Anurag Rana, this efficiency move could help balance the surge in spending on AI infrastructure. He also believes that this workforce reduction could reflect a greater push to adopt AI technology internally in the company's operations. As of the end of June 2024, Microsoft had around 228,000 employees, including 45,000 people working in the sales and marketing division. The company often restructures teams and changes organizations towards the end of the fiscal year which closes in June. Meanwhile, Microsoft's Chief Commercial Officer, Judson Althoff, is scheduled to take a two-month leave starting this month. The company stated that the leave was planned in advance and Althoff is scheduled to return in September. 

Tag: Artificial Intelligence Microsoft