Microsoft Announces Second Major Layoff This Year, Potentially Affecting 9,000 Roles

On Wednesday, tech titan Microsoft announced a new round of job cuts, potentially impacting up to 9,000 roles. This marks the second major layoff for the company this year, as it aims to streamline operations and control costs.

A Microsoft spokesperson stated that the planned reductions represent less than 4% of the company’s total workforce and will span across various departments, geographies, and levels. The move is intended to simplify processes and reduce management layers.

The spokesperson explained, “We will continue to make the necessary organizational changes to help us and our teams achieve these outcomes in a dynamic market.”

As of the end of June 2024, Microsoft employed 228,000 individuals globally, with 45,000 of those in sales and marketing roles. The tech giant typically undertakes team restructures and announces personnel changes near the close of its fiscal year.

Previous reports indicated that Microsoft planned to slash thousands of jobs in July, primarily targeting sales personnel, with ripple effects expected even in divisions like Xbox.

This follows a significant announcement in May, where Microsoft detailed its plan to lay off 3% of its global workforce, equating to over 6,000 employees—the largest workforce reduction since the 10,000 job cuts made in 2023.

The company also notified Washington state employment officials of 300 layoffs at its Redmond, Washington headquarters in June, and nearly 2,000 job reductions in the Puget Sound region in May.

Microsoft has committed to $80 billion in capital expenditures for fiscal year 2025. However, the soaring costs associated with expanding its artificial intelligence infrastructure are pressuring its profit margins, with executives anticipating a decline in cloud profit margins for the upcoming quarter compared to the previous year.

In a broader industry trend, Meta earlier this year announced it would cut approximately 5% of its “lowest performers,” while Alphabet also parted ways with hundreds of employees last year. These workforce adjustments reflect a wider trend across the corporate landscape as businesses navigate economic uncertainties and rising costs, seeking to optimize operations and mitigate further financial pressure.