Tech giant Microsoft has announced plans to lay off up to 9,000 employees in its latest wave of job cuts this year.
The company announced on Wednesday, July 2, that the decision affecting nearly 4% of its global workforce is part of a broader strategy to control costs while continuing to invest heavily in artificial intelligence infrastructure.
During the company’s 2025 fiscal year, which ended Monday, Microsoft planned to spend more than $80 billion (Ksh 10 trillion) on infrastructure to meet AI demands, a $25 billion (Ksh 3.3trillion) increase in capital expenditures from the company’s 2024 fiscal year.
As of June 2024, Microsoft had approximately 228,000 employees worldwide. In May, the tech company had already announced layoffs impacting around 6,000 workers.
Microsoft to Lay Off 9,000 Employees to Fund AI Expansion
According to a Bloomberg News report in June, the company was planning to cut thousands of jobs, particularly in its sales division.
This move marks Microsoft’s largest round of layoffs since it cut 10,000 jobs in 2023 and comes amid ongoing workforce reductions across the tech industry.
“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.
The spokesperson also noted that Microsoft intends to reduce organizational layers by cutting down the number of managers, while streamlining products, processes, and roles.
At the same time, the company said several divisions would be affected without specifying which ones, but reports suggest that its Xbox video gaming unit will be hit.
The Verge reported that Xbox head Phil Spencer sent an internal memo informing staff that the layoffs would affect his team.
“The cuts will either end or scale back work in certain areas of the business and follow Microsoft’s broader strategy of removing layers of management to improve agility and effectiveness,” Spencer said.
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Tech Giant Gaming Division Hit by Layoffs
Bloomberg News also reported that Microsoft’s Barcelona-based King division, which develops the Candy Crush video game, is cutting 10% of its workforce—about 200 jobs.
In addition, Microsoft confirmed to Reuters that its gaming division was affected by the layoffs but emphasized that the unit remains intact. The company declined to provide further details.
Earlier this year, Microsoft CEO Satya Nadella revealed that between 20% and 30% of the company’s code was already being generated by AI.
However, Microsoft’s push into AI is not necessarily about replacing workers with machines. Instead, the high costs of developing and deploying AI infrastructure over several years have prompted the company to explore all means possible to trim expenses.
Microsoft is also a major investor and shareholder in OpenAI, the developer of the popular chatbot ChatGPT, though recent reports suggest growing tension in their relationship.
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Tech Layoffs
Other tech giants investing heavily in AI have also carried out layoffs this year. Meta, the parent company of Facebook, announced earlier in 2025 that it would cut around 5% of its “lowest performers.”
According to The Verge, the layoffs affected employees in its Reality Labs division, which manages virtual reality and wearable technology.
The cuts also affected teams working in Oculus Studios, Meta’s in-house games division for Quest headsets, as well as some employees involved in the company’s hardware efforts, according to people familiar with the matter.
Google has similarly laid off hundreds of employees over the past year as well.
Amazon, too, has implemented job cuts across various segments, most recently in its books division. Earlier, it had laid off staff in its devices and services unit, as well as communications teams.
Last month, Amazon CEO Andy Jassy warned employees that AI would eventually enable the company to reduce headcount.
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