REDMOND, WA – July 6, 2025 – Microsoft has confirmed a major round of layoffs, with approximately 9,000 positions being eliminated across its global workforce. This marks one of the most substantial job cuts at the tech giant in recent years, forming part of ongoing strategic restructuring efforts.

This latest wave of reductions brings the total number of jobs cut by Microsoft to over 15,000 this year, following previous adjustments in May (around 6,000 jobs) and June (an additional 300 positions). The current cuts represent less than 4% of Microsoft’s vast workforce, which stood at 228,000 as of June 2024.

Why the Layoffs? Key Reasons Cited:

Microsoft attributes these “organizational changes” to several strategic imperatives aimed at optimizing its operations and focusing on future growth:

  • Restructuring and Streamlining Operations: The company emphasizes the need to “best position the company and teams for success in a dynamic marketplace.” This includes a deliberate effort to “remove layers of management to increase agility and effectiveness” and reduce organizational hierarchy by eliminating redundant supervisory roles.
  • Focus on AI and Strategic Growth Areas: A primary driver behind the restructuring is Microsoft’s aggressive investment in Artificial Intelligence (AI) and expanding its cloud infrastructure. Resources are being reallocated to these high-priority areas, which may lead to reductions in roles not directly aligned with these future directions. Some reports even speculate that the company’s own AI code-writing products might be reducing the need for certain programming roles.
  • Cost Cutting and Efficiency Drive: Despite strong financial performance, these layoffs are also part of a broader “efficiency push” and “cost efficiencies,” a common trend across the tech industry in response to evolving economic landscapes.

Divisions and Roles Most Affected:

While the layoffs are widespread, certain divisions and roles have been particularly impacted:

  • Xbox Gaming Division: This sector has experienced significant job losses, affecting teams at King (Candy Crush developer), ZeniMax, and leading to the closure of studios like The Initiative (which was reportedly working on Perfect Dark) and the cancellation of projects such as Perfect Dark and Everwild.
  • Sales and Marketing: These divisions are also undergoing substantial reductions, with a shift towards utilizing third-party firms for some sales functions.
  • Middle Management: A specific focus of these layoffs is the reduction of management layers to foster a flatter organizational structure.
  • The cuts have impacted various teams, geographical locations, and experience levels, including product and engineering roles, as well as corporate and supporting functions.