Microsoft has announced it is cutting around 6,000 jobs, or nearly 3% of its workforce, in its largest round of layoffs since early 2023. The cuts began Tuesday and come as the company continues to invest heavily in artificial intelligence (AI) technologies.
The state of Washington, where Microsoft is headquartered, will be especially affected. Nearly 2,000 workers there—mainly in software engineering and product roles—will lose their jobs.
The layoffs come despite Microsoft recently reporting strong sales and profits, beating Wall Street expectations for the first quarter of 2024. Still, the company says these layoffs are part of “organisational changes” aimed at boosting performance and agility.
Most of the job cuts will target management positions across various teams and locations, including LinkedIn and the Xbox gaming division. Microsoft said the reductions will make teams more efficient and improve overall productivity.
Daniel Zhao, a lead economist at Glassdoor, said layoffs aren’t always a sign of financial trouble. Big tech firms like Microsoft are adjusting strategies after years of rapid hiring during the pandemic.
Microsoft is currently spending $80 billion to build data centres and other infrastructure to support its growing AI ambitions. Though AI is changing the way Microsoft operates, experts say it’s not the main reason for the layoffs.
The official last day for affected employees will be in July. For many, the news has brought disappointment and sadness, with some managers sharing emotional posts online.
Microsoft has not ruled out further changes in the months ahead.
