Microsoft to lay off around 9,000 workers in its largest cuts since 2023

In a significant move, Microsoft has confirmed plans to lay off approximately 9,000 employees, marking its largest workforce reduction since 2023. This decision represents less than 4% of the company’s total personnel and is part of a broader trend of job cuts sweeping across the tech sector. The announcement comes just months after Microsoft let go of around 7,000 workers in May, indicating ongoing structural changes within the organization. A company spokesperson stated that these layoffs are necessary to optimize operations and enhance productivity in a rapidly changing market. The spokesperson emphasized the importance of reducing managerial layers and leveraging new technologies to improve employee efficiency. Additionally, there is speculation regarding the role of artificial intelligence in these cuts, as Microsoft has been heavily investing in AI capabilities. CEO Satya Nadella previously noted that AI is now generating 20% to 30% of the company’s code, underscoring a shift toward automation and efficiency. Reports suggest that divisions such as Xbox could be directly impacted, with Xbox leader Phil Spencer alerting his team about potential job losses. While the exact departments affected remain unclear, the trend aligns with other tech giants like Meta and Bumble, which have also initiated layoffs this year. Furthermore, Amazon CEO Andy Jassy has hinted that AI advancements may eventually lead to workforce reductions in his company as well. Despite the layoffs, Microsoft reported an 18% increase in quarterly profits, reaching $25.8 billion for the three months ending March 31, driven largely by robust performance in its cloud services and AI offerings. The company is anticipated to release its fiscal fourth-quarter earnings later this month, which will provide further insight into its financial health amidst these workforce changes.