Microsoft is Cutting 3 Percent of its Workforce

Microsoft confirmed that it is laying off 3 percent of its workforce across all employee levels, teams and geographies, starting today.

“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft statement explains.

Microsoft’s latest headcount is almost a year old: In June 2024, it said that it had 228,000 employees worldwide. And in the conference call tied to its latest financial results, Microsoft CFO Amy Hood noted that employee headcount had risen about 2 percent since then. So the layoffs should impact about 6,000 employees and will leave Microsoft with a slightly smaller employee count–about 222,000–than it had a year earlier.

Microsoft previously laid off 1900 employees in January 2024, thanks largely to redundancies caused by its acquisition of Activision Blizzard. But these layoffs are likely tied to the costs associated with AI, with Microsoft on track to spend over $80 billion in the current fiscal year building out its AI infrastructure.

“We continue to focus on building high-performing teams and increasing our agility by reducing layers with fewer managers,” Ms. Hood said during that conference call, perhaps referencing the impetus behind these layoffs.