Microsoft Lays Off 6,000 Employees – 3% of Global Workforce in 2025 Restructuring

Microsoft confirms 6,000 job cuts—3% of its global workforce—as part of a major restructuring despite strong financial results. Learn more about the reasons and impact.

Microsoft Confirms Major Workforce Reduction

On May 13, Microsoft announced layoffs impacting around 6,000 employees, or approximately 3% of its global workforce. The job cuts span across all levels, departments, and regions, and are part of a broader plan to restructure for greater agility and efficiency in today’s evolving tech landscape.

“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson told CNBC.

Strong Earnings Don’t Stop the Cuts

Despite the layoffs, Microsoft reported a strong quarterly net income of $25.8 billion, exceeding Wall Street expectations. However, the company is focused on streamlining operations, adjusting management layers, and preparing for long-term competitiveness.

Redmond Headquarters Hit Hard

In Washington state, Microsoft disclosed it was cutting 1,985 roles related to its Redmond headquarters, including 1,510 office-based employees. This marks the company’s largest layoff round since the 10,000 job cuts in 2023.

Unlike January’s performance-based layoffs, this latest round is not related to employee performance. Instead, it's aimed at reducing redundant management layers—a similar approach taken by Amazon earlier this year.

Microsoft Not Alone in Tech Downsizing

Microsoft joins other tech companies in workforce restructuring. Just last week, cybersecurity firm CrowdStrike announced a 5% workforce reduction, signaling an ongoing trend in the tech sector amid organizational shifts and AI adoption.

Satya Nadella’s Vision: Adapting for the AI Era

Back in January, CEO Satya Nadella highlighted the need to refine Microsoft’s go-to-market strategy, especially after slower-than-expected growth in Azure cloud revenue (excluding AI-related services). Conversely, performance in AI-integrated cloud offerings exceeded projections.

“At a time of platform shifts, you kind of want to make sure you lean into even the new design wins, and you just don’t keep doing the stuff that you did in the previous generation,” Nadella explained.

Stock Prices Remain Strong

Despite layoff news, Microsoft stock continues to perform well. On May 13, shares closed at $449.26, nearing the all-time high of $467.56 in July 2024. Investors appear confident in Microsoft’s long-term AI-focused strategy.

Conclusion

Microsoft’s latest round of layoffs reflects a strategic pivot toward leaner operations and AI-driven growth, even as it maintains strong financial performance. As the tech industry enters a new chapter powered by artificial intelligence, structural shifts like these may become the new norm.

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Source: CNBC