Microsoft laying off about 9000 people, or 4% of its global workforce
Microsoft has confirmed it will cut roughly 9,000 jobs, which accounts for about 4% of its 228,000 strong global workforce, marking its second major wave of layoffs this year.
This move complements the earlier reduction of around 6,000 positions in May, along with smaller cuts in January and June, exceeding 15,000 roles eliminated in 2025 alone.
These layoffs span sales and marketing, gaming, engineering, and international offices. Bloomberg reports that the Xbox division, including King (Candy Crush), ZeniMax, and Rare, is hit hard:
“long‑developing game Everwild has been canceled” and management layers are being reduced.
In Barcelona, the King studio will shed about 200 jobs, roughly 10% of its staff.
The company defends the move as strategic and overdue, highlighting its heavy investment in artificial intelligence infrastructure. With approximately $80 billion in capital spending earmarked for fiscal 2025, growing AI‑related costs are squeezing margins, prompting tighter cost discipline.
This restructuring coincides with internal changes at the top. Chief Commercial Officer Judson Althoff is scheduled for an eight‑week sabbatical, aligned with his division’s restructuring needs.
Phil Spencer, head of Xbox, noted the necessity to refocus on high‑growth initiatives and “remove layers of management to increase agility and effectiveness.”
Financially, the timing underlines Microsoft's strategic discipline. Despite a strong Q3 performance of $70 billion revenue, $26 billion net income, the shares have reacted modestly, posting minor dips following the announcement.
From an insider perspective, Microsoft is seizing fiscal year‑end momentum to streamline its hierarchy, optimize AI spending, and sharpen its competitive posture. The company bets that a leaner organization and redirected investment toward AI and cloud services, Azure, and Copilot especially, will yield long‑term returns.
That said, workforce reduction on this scale inevitably impacts morale and recruitment, especially where talent is being redirected or roles eliminated. The layoffs will also shift internal dynamics and priorities. Resource reallocation may accelerate internal AI adoption and automation in sales and marketing.
For affected communities, gaming, sales teams, and middle‑management, the uncertainty remains high, even as severance and placement support are being offered.
In sum, Microsoft is executing a calculated contraction to fuel its AI‑focused agenda. This approach mirrors trends across tech giants like Google, Amazon, and Meta, which are also pruning while pursuing growth. The broader tech ecosystem is adjusting: lockdown on costs, but also doubling down on innovation.
Will this sharper structure improve execution speed and shareholder returns? The next earnings cycle will offer early indicators.
