Microsoft is reducing its global workforce by about 3%, impacting thousands of employees across roles and locations, as per a CNBC report.
The decision follows a strong April earnings report and record-high share prices, but the company says the move is part of ongoing organisational restructuring.
The layoffs are not performance-related and come less than two years after Microsoft slashed 10,000 roles in 2023, marking the company’s second-largest round of job cuts in recent years.
A key objective this time is to streamline operations and reduce management layers, with the company navigating a shifting enterprise landscape driven by artificial intelligence.
MSFT stock was trading slightly lower on Tuesday after the news made headlines.
At the time of writing, the stock was down 0.41% to trade at around $447.
Details of the move
The company had 228,000 employees worldwide as of June. With a 3% reduction, more than 6,800 jobs are expected to be affected.
Microsoft told the media house that these changes are not tied to individual performance but instead are meant to optimise its organisational structure to better adapt to current market dynamics.
While the layoffs are spread across business units, they follow internal reviews aimed at boosting efficiency, particularly in light of ongoing investments in AI-driven platforms.
Microsoft’s recent emphasis on artificial intelligence has led to strategic shifts within key units.
While performance in AI cloud growth surpassed expectations earlier this year, the company is realigning its go-to-market strategy to better prioritise AI products and services.
Nadella had previously noted the importance of adapting incentives and operations to reflect broader platform transitions.
He said the company was making changes to “lean into the new design wins” rather than continue legacy strategies that no longer fit the evolving enterprise technology landscape.
Broader tech sector trend
The move comes just days after cybersecurity firm CrowdStrike announced that it would lay off 5% of its workforce.
Microsoft itself had already initiated smaller rounds of job cuts earlier in 2025, which were performance-based.
Microsoft’s actions mirror a growing pattern across the technology sector, where firms are cutting costs and reshaping teams to align with the demands of automation, generative AI, and new enterprise solutions.
As artificial intelligence becomes a key driver of growth, Big Tech companies have been ramping up investments in the sector while cutting costs in other areas to protect profitability.
Google has reportedly laid off hundreds of employees over the past year as part of its efforts to manage expenses and refocus resources toward AI initiatives.
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