Microsoft to Cut 6,000 Jobs in Largest Staff Reduction in Two Years
Microsoft has begun its largest round of layoffs in more than two years, cutting nearly 3% of its global workforce—an estimated 6,000 roles—people familiar with the decision told The Times.
The fresh round of job cuts marks the most significant reduction since early 2023, when the tech giant slashed about 10,000 positions amid industry-wide corrections following the pandemic boom. Though the company has not officially disclosed the total number affected, the layoffs are expected to reach across business units, including LinkedIn and Xbox.
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said Tuesday evening.
However, the layoff is coming two weeks after Microsoft CEO, Satya Nadella, said that AI writes 20% to 30% of their coding.
The layoffs follow a period of strong financial results. In its most recent quarterly report, Microsoft posted robust growth in its cloud computing division, Azure. But insiders say the cuts reflect growing cost pressures tied to the company’s massive investments in artificial intelligence infrastructure.
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While revenue remains strong, profitability has narrowed. Microsoft Cloud’s gross margin dropped to 69% in the three months ending March, down from 72% the previous year. The company plans to spend $80 billion this fiscal year—largely to expand AI-focused data centers.
Gil Luria, an analyst at DA Davidson, told The Times the cuts are a direct response to those mounting costs.
“Microsoft is very closely managing the margin pressure created by its heightened AI investments,” he said.
Microsoft, which had 228,000 employees as of June last year, is also a lead investor in OpenAI, the creator of ChatGPT.
