Microsoft Plans to Lay Off 9,000 Employees

In a move that has become increasingly common across the tech sector, Microsoft announced plans to lay off about 9,000 employees, representing 4% of its global workforce.

The reductions will target a range of business units, regions, and job categories, including the company’s sales division and its Xbox gaming division, according to the Associated Press.

“To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness,” Phil Spencer, Microsoft’s CEO of gaming, wrote in a memo to employees in that division on Wednesday, CNBC reported.

Cuts blamed on AI spending

The move follows earlier job cuts this year, including significant reductions in May when the company eliminated more than 6,000 roles — approximately 3% of its workforce — to focus heavily on AI adoption. Those cuts primarily affected people who worked in software engineering and product management roles.

“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement quoted by CNBC.

As of June 2024, the company employed roughly 228,000 full-time workers worldwide, based on its most recent annual filing. Updated employment figures are expected in the upcoming report to the Securities and Exchange Commission.

“After spending tens of billions on data centers and AI development, Microsoft pledged to Wall Street that it would put a lid on costs,’’ wrote Brody Ford, a reporter at Bloomberg News, on LinkedIn. “So far this year, that has meant at least 15,000 people losing their jobs.”

Multiple other tech companies have trimmed their staff this year, resulting in 76,214 job cuts, up 27% from the same period last year, according to outplacement firm Challenger, Gray & Christmas.

“The disruptions in this industry, both from the advancement of AI and the current uncertainties around visas, has cost thousands of jobs this year,” the firm said in a statement.

Read TechRepublic’s coverage of Microsoft’s May layoffs, when the company cut thousands of roles to bankroll its AI transformation.