Microsoft Announces Further Workforce Cuts as It Restructures for AI-Focused Future

Microsoft continues to reshape its global workforce as part of a broader restructuring aimed at prioritising artificial intelligence and cloud computing, following major job cuts over the past year.

The technology giant confirmed that it reduced its workforce by thousands of roles in 2025, including a round of layoffs affecting approximately 9,000 employees, or about 4% of its global staff. The cuts primarily impacted teams in sales, gaming, support services and corporate operations, with a significant number of roles eliminated in the United States.

Microsoft said the workforce reductions were necessary to streamline operations and reallocate resources toward long-term growth areas, particularly artificial intelligence, cloud infrastructure and enterprise software. The company has invested heavily in AI technologies, including generative AI tools across its products such as Azure, Office and Windows.

CEO Satya Nadella has described the transition as essential to maintaining competitiveness, noting that the rapid pace of AI development requires significant organisational changes. Despite the job cuts, Microsoft has continued to hire selectively for roles in AI research, cloud engineering, and cybersecurity.

The restructuring comes amid a broader slowdown in the global tech sector, where many large companies are reducing headcount after years of rapid expansion. Analysts say Microsoft’s moves reflect a broader industry shift toward efficiency and automation as companies prepare for a more uncertain economic environment in 2026.

Microsoft reported stable revenue growth, mainly driven by its cloud business, but rising CI infrastructure costs are increasing pressure to manage expenses. The company has not ruled out additional targeted workforce changes later in 2026.

As Microsoft continues to pivot toward an AI-first strategy, investors and employees alike will be watching closely to see how the company balances innovation, profitability and workforce stability in the year ahead.

Sources

• Reuters – Microsoft planning thousands of job cuts focused on sales and restructuring
  https://www.reuters.com/business/world-at-work/microsoft-planning-thousands-job-cuts-aimed-salespeople-bloomberg-news-reports-2025-06-18/
• CBS News – Microsoft to lay off about 9,000 workers in principal workforce reduction
  https://www.cbsnews.com/news/microsoft-layoffs-9000-workers/
• Bloomberg – Microsoft job cuts reflect shift toward AI and cloud priorities
  https://www.bloomberg.com/news/articles/2025-06-18/microsoft-layoffs-restructuring-ai
• Business Insider – Microsoft layoffs hit multiple divisions as tech sector cools
  https://www.businessinsider.com/recent-company-layoffs-laying-off-workers-2025