Microsoft has announced plans to lay off approximately 6,000 employees, or just under 3% of its global workforce, as it seeks to balance soaring investments in artificial intelligence with cost control measures.
The job reductions, revealed on Tuesday, will affect roles across departments and regions, marking the company’s largest round of cuts since the 10,000 layoffs carried out in 2023. While a smaller round of performance-related dismissals occurred in January, Microsoft clarified that the latest restructuring is unrelated.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said via email.
The tech giant, which reported 228,000 employees as of June last year, has routinely adjusted its workforce to focus on high-priority areas. Its latest move comes even after a strong quarterly earnings report highlighted robust growth in its Azure cloud business. Still, the financial burden of ramping up AI infrastructure has started to show.
Margins for Microsoft Cloud fell to 69% in the March quarter, down from 72% the previous year, driven largely by the company’s ambitious AI-related capital expenditures. Microsoft has earmarked $80 billion in spending for the current fiscal year, with much of it directed toward expanding data center capacity to meet AI demand.
Gil Luria, an analyst at D.A. Davidson, said the job cuts reflect Microsoft’s effort to manage mounting cost pressures. “Microsoft is very closely watching the margin impact of its AI investments,” he said. “If the company continues spending at this rate, it may need to trim at least 10,000 jobs annually to offset depreciation from its capital investments.”
Microsoft joins a growing list of tech firms, including Google, that have trimmed staff over the past year while doubling down on artificial intelligence as a long-term growth engine. Despite the layoffs, Microsoft maintains its aggressive AI strategy, betting that the technology will redefine its future and reshape the broader digital landscape.
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