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Microsoft has launched its second major round of company-wide job cuts this year as the Big Tech group moves to cut costs.
The Redmond, Washington-based company said it would eliminate just under 4 per cent of its workforce, equivalent to roughly 9,000 workers. The job losses will be spread across the company.
Wednesday’s announcement follows Microsoft’s decision to cut roughly 6,000 roles in May and 2,000 roles in January for what it called “performance-related” reasons. These waves come on top of axing hundreds of jobs in rolling cuts throughout this year.
Taken together, Microsoft has culled more than 7 per cent of its global workforce since the start of the year.
Microsoft is streamlining its operations at a time when major technology companies are dealing with economic uncertainty under US President Donald Trump, and grappling with the financial sustainability of vast artificial intelligence investments.
“We continue to implement organisational changes necessary to best position the company and teams for success in a dynamic marketplace,” the company said.
Microsoft has not explicitly attributed its latest cuts to AI despite chief executive Satya Nadella previously stating that as much as a third of the company’s code is now written by software. Regulatory filings in Washington state where it is headquartered showed software engineers made up 40 per cent of roughly 2,000 roles axed in May this year.
The software giant pledged to spend $80bn on data centre infrastructure in the fiscal year ending June 30. It has positioned itself at the centre of a race to commercialise the technology.
The company had 228,000 workers at the end of June 2024, having already eliminated some 2,500 roles from its Xbox gaming unit and about 1,000 roles across its HoloLens augmented reality headset and Azure cloud computing units.
In 2023, Microsoft said it would let go of 10,000 employees as it dealt with slower revenue growth.
Andy Jassy, chief executive of the ecommerce group Amazon, has warned white collar employees that their jobs are at risk from AI — which he said was already yielding efficiencies across its logistics network.
“We will need fewer people doing some of the jobs that are being done today . . . [and] we expect that this will reduce our total corporate workforce,” he said in a memo to employees last month.
Amazon eliminated 27,000 roles in two rounds of job cuts in 2023, while its cloud division Amazon Web Services slashed hundreds of roles in 2024.
Microsoft posted better than expected earnings in the three months to the end of March, with the company lauding strong growth in its cloud division. Its shares have outperformed peers since the beginning of this year.
Chief financial officer Amy Hood told investors in April that Microsoft was focused on “building high-performing teams and increasing our agility by reducing layers with fewer managers”.
