Microsoft to Lay Off 9,000 Employees, Impacting 4% of Global Workforce

Microsoft Launches Second Major Layoff of 2025, Cutting 9,000 Jobs Amid Strategic Shift.

Microsoft has initiated its largest round of layoffs in over two years, marking its second major workforce reduction in recent months. The company began notifying affected employees on Wednesday, with the cuts impacting approximately 9,000 workers — around 4% of its global workforce as of last year.

The layoffs will span multiple business units, including the Xbox gaming division and the global sales team. This latest round follows earlier cuts in May and June, as Microsoft intensifies efforts to streamline operations and double down on growth areas like artificial intelligence and cloud services.

In a statement, Microsoft said, “We continue to implement organisational changes necessary to best position the company and teams for success in a dynamic marketplace.”

Xbox CEO Phil Spencer, in an internal memo, emphasized that the move was aimed at securing “enduring success” for the gaming business by focusing on strategic priorities and “removing layers of management to increase agility and effectiveness.”

As of June 2024, Microsoft had approximately 228,000 full-time employees. Combined with earlier rounds of job cuts — including 6,000 in May and around 2,300 more in May and June in Washington state — the total number of layoffs this year continues to climb.

The job losses have not been limited to support roles. In May, Microsoft laid off large numbers of software engineers and product managers, prompting concerns that its growing reliance on AI-powered tools — including code-generating products — may be reducing the need for traditional developer roles. CFO Amy Hood previously stated that the company aims to “build high-performing teams and increase agility by reducing layers with fewer managers.”

Industry experts believe the restructuring reflects Microsoft’s prioritization of future-facing technologies. Dan Ives, an analyst at Wedbush Securities, noted: “They’re laser-focused on AI, cloud, and next-gen offerings. Xbox and other slower-growth areas are bearing the brunt. Microsoft overhired, and now Nadella and his team are pushing for operational efficiency — that’s what Wall Street wants to see.”

The company has yet to confirm whether additional rounds of layoffs are expected, but its messaging indicates a continued drive toward leaner management and greater automation as AI reshapes how Microsoft delivers software and services.