Microsoft is laying off approximately 7,000 employees, or around 3% of its global workforce, as part of a broader cost-cutting effort while it continues to ramp up investments in artificial intelligence, CNBC reported.
The job cuts, expected to affect employees across levels and geographies, are reportedly the largest since the company’s 10,000-person layoff in 2023. The move is aimed at streamlining operations, particularly within management structures, rather than addressing performance issues, according to the report.
Microsoft has not yet commented publicly on the layoffs. Its stock was marginally lower in early trading following the news.
The latest workforce reduction comes amid a wider trend among major technology firms to reduce operational costs while allocating significant capital toward AI development. Microsoft, a key investor in OpenAI and a leading player in the generative AI space, has been funnelling billions into AI infrastructure and services.
In January, the company reportedly laid off a smaller group of employees over performance-related concerns. The current round of cuts, however, is said to be unrelated and more structural in nature.
The announcement follows Microsoft’s recent earnings report, which showed stronger-than-expected performance in its cloud computing division, Azure, helping to ease investor concerns in a volatile economic environment.
At the end of June 2023, Microsoft employed approximately 228,000 people globally, including 126,000 in the United States, according to its latest filing with the U.S. Securities and Exchange Commission.
The move mirrors similar cost-cutting strategies by other tech giants. Google, for instance, has also made significant layoffs over the past year as it reallocates resources to focus on AI innovation.
