Microsoft Layoffs 2025: Thousands of Employees Impacted in Latest Job Cuts

Microsoft has confirmed a fresh wave of job cuts affecting roughly 9,000 employees — just under 4 percent of its 228,000-strong global workforce — as the company reshapes its structure to fund aggressive investments in artificial intelligence and cloud infrastructure. Why the layoffs keep coming Microsoft’s FY-2026 kicked off this week, and executives traditionally unveil reorganizations at the start of each fiscal cycle. CEO Satya Nadella’s leadership team is aiming to “reduce organizational layers” and “increase agility,” according to an internal memo quoted by multiple outlets. The move follows earlier cuts of more than 6,000 roles in May and several hundred in June, underscoring the company’s strategy of trimming headcount to offset soaring capital expenditures tied to Azure data-center expansion and generative-AI services. Divisions hit hardest • Gaming/Xbox: Phil Spencer told employees the gaming group will “end or decrease work in certain areas,” including King, the Candy Crush studio in Barcelona that is eliminating about 200 roles. • Sales & Marketing: Bloomberg previously reported thousands of sales positions were at risk as Microsoft retools its go-to-market model for cloud and Copilot AI offerings. • Washington State hubs: Filings show 830 positions were lost in Redmond and Bellevue, reflecting the Pacific Northwest’s outsized share of Microsoft’s talent base. Broader tech-sector context Microsoft’s announcement extends a 2025 layoff trend across Big Tech as Alphabet, Meta and Amazon also streamline to fund multibillion-dollar AI bets. Analysts say AI build-outs can double data-center energy and hardware costs, pressuring operating margins even for cash-rich firms. What it means for employees and investors • Severance: Impacted U.S. workers receive two months’ continued pay plus standard severance and health-care coverage; packages vary internationally. • Hiring outlook: Microsoft still lists thousands of open roles in AI research, cybersecurity, and cloud infrastructure, signaling a “hire in priority areas, trim elsewhere” philosophy. • Stock reaction: Shares dipped 0.2 percent after the news but remain up nearly 20 percent year-to-date, buoyed by record cloud revenue and optimism that AI services will accelerate long-term growth. Employee sentiment and next steps Internal forums show concern over workload redistribution and manager-to-IC ratio shifts. Career coaches advise affected staff to highlight Azure, M365 and AI experience, which remain highly sought-after skills in the job market. Microsoft says it will “continue to invest in strategic growth areas,” hinting at further role realignment as AI commercialization gathers pace. Key takeaways • Second major layoff round in 2025, totaling ~15,000 roles year-to-date. • Cuts finance record-breaking $80 billion cap-ex plan focused on AI and cloud. • Gaming, sales and middle-management roles see the biggest reductions. • Microsoft maintains robust hiring for high-priority AI and security positions. Job seekers and investors alike should watch Microsoft’s July earnings call for updated guidance on AI spending, margin outlook and any additional workforce adjustments.