Microsoft has announced its plan to lay off 3% of its workforce, translating to 6000 employees globally.
This marks its largest job cut since 2023, when it let go of 10,000 employees. The layoffs are part of Microsoft’s plan to manage and cut costs by shedding $1.4B/year in cost management and balance with heavy AI investments.
Microsoft plans to invest $80 billion in capital spending this financial year, mostly for AI infrastructure like data centres.
Analyst Gil Luria from D.A. Davidson noted that Microsoft could need to cut at least 10,000 jobs annually to offset the depreciation costs from these investments in a statement on his X account.
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“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” Microsoft CEO Satya Nadella wrote in a formal email to his employees.
“While we are eliminating roles in some areas, we will continue to hire in key strategic areas,” he added.
Microsoft is still in strong financial shape and reported a 25.8 billion dollars net income for the quarter ending in April and beating analyst expectations. However, the company says the restructuring is aimed at cutting down on management layers and improving efficiency.
This is similar to what other tech firms have recently done. Amazon cut off 14,000 managerial positions in early 2025, aiming to save $3 billion annually. This marked a 13% drop in their workforce.
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Microsoft had 228,000 employees in the beginning of 2025. 2000 were fired in January this year.
Rival Google has also laid off hundreds of employees in the past year, as it looks to control costs and prioritize AI, media reports have said.
Many of the affected employees have taken to their social media accounts to show their anger and disappointment.
Deedydas, former team co-founder of Google, states that computer science graduates are already struggling to find jobs and the layoffs just worsen the trend.
The layoffs span “all levels and geographies,” meaning employees in regions like Kenya, where Microsoft operates the African Development Centre (ADC), may be affected.
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