In a major move, tech giant Microsoft is planning to cut near to 7,000 jobs, marking its one of the biggest round of layoffs since 2023. This decision will affect about 3% of its total workforce, as the company looks to restructure and focus on its priority areas.
Why Is Microsoft Laying Off Employees?
According to reports, Microsoft is aiming to streamline operations and reduce costs amid changing business needs. Although the company continues to perform strongly in areas like cloud computing and artificial intelligence (AI), it is now realigning its teams and resources. The layoffs are expected to impact employees across different departments globally, not just in the United States.
Microsoft has not shared the exact list of teams or roles affected, but insiders suggest that departments with overlapping functions or those not directly contributing to the company’s new focus areas may be hit the hardest. Microsoft is reallocating resources to support its significant investments in AI infrastructure, with capital expenditures expected to reach up to $80 billion in fiscal year 2025.
In addition to structural layoffs, Microsoft has initiated performance-based job cuts. Employees not meeting performance standards have been terminated effective immediately, losing access to company systems and benefits on their last day. These individuals are not receiving severance packages, and future job applications to Microsoft will consider past performance and the basis of termination.
A Look Back: Layoffs in the Tech Industry
This isn’t the first time Microsoft has laid off employees in recent years. In 2023, the company let go of around 10,000 employees. Other tech giants like Google, Amazon, Meta, and Salesforce have also cut jobs as part of cost-cutting efforts and organizational changes.
The current trend shows that even big tech companies are not immune to market pressure, rising costs, and the push for more AI-driven solutions.
What Does This Mean for the Industry?
Microsoft’s latest layoffs signal a broader shift in the tech industry. Companies are increasingly focusing on automation, AI, and efficiency, which often leads to restructuring and downsizing. For job seekers in the tech world, this means the competition is tougher, and upskilling in areas like AI, cloud computing, and cybersecurity is more important than ever.
While layoffs are always difficult for those affected, Microsoft may offer support to impacted employees, including severance pay and job placement assistance though not officially declared. This move shows how even the biggest tech firms need to adapt quickly in a fast-changing digital world.