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Microsoft is set to lay off nearly 4% of its workforce, impacting around 9,000 employees across different departments.
The tech giant announced that this decision is part of ongoing plans to streamline operations and cut staffing expenses as it invests significantly in artificial intelligence infrastructure.
As of June 2024, the company had about 228,000 employees globally and had previously disclosed layoffs in May, which affected approximately 6,000 workers.
On Wednesday, Microsoft revealed its intention to reduce management layers by cutting down the number of managers and simplifying its products, processes, and roles.
While the company confirmed that the latest reductions would affect various divisions, it did not specify which teams would be the most impacted.
However, reports from Bloomberg in recent weeks suggest that sales and marketing personnel, along with those in the gaming division, are likely to be among the hardest hit.
Xbox chief Phil Spencer has reportedly informed staff that the gaming unit would face cuts, stating that the reductions would “end or decrease work in certain areas of the business” and align with Microsoft's broader strategy of eliminating management layers to enhance agility and efficiency.
As Microsoft finalizes its workforce reduction plans, other significant tech firms heavily investing in AI are also implementing cuts. Earlier this year, Meta (the parent company of Facebook) announced it would cut about 5% of its “lowest performers,” while Google parent Alphabet has laid off hundreds of workers over the past year.
Amazon has also made workforce reductions across various business segments, most recently in its books division, following earlier layoffs in its devices, services, and communications divisions.
These economic uncertainties and rising operational costs have led to widespread job cuts across corporate America, as companies strive to streamline operations and prepare for potential financial challenges.
