Microsoft is cutting approximately 6,840 jobs, amounting to 3% of its global workforce, despite recently posting better-than-expected earnings. The layoffs began Tuesday and are hitting every division, including LinkedIn and Xbox, as the company sharpens its focus on reducing management layers.
Microsoft’s latest reported headcount in June 2024 stood at 228,000 full-time employees, with 55% based in the United States. The tech giant, headquartered in Redmond, Washington, did not specify which offices or regions would be hit hardest, but confirmed the reductions span all levels and geographies.
The move follows a smaller round of performance-based layoffs in January. CFO Amy Hood explained during the April earnings call that the company is prioritizing “building high-performing teams and increasing our agility by reducing layers with fewer managers.” She added that while March headcount was up 2% compared to the previous year, it was slightly down from the end of 2024.
The layoffs come at a time when Microsoft is heavily investing in AI and cloud computing. Despite the company’s strong financial performance in the first quarter of 2025, leadership appears determined to streamline operations and shed roles deemed nonessential to its long-term growth strategy.
Layoff notices have been distributed across business units, with more expected in the days ahead. The downsizing mirrors trends seen across the tech industry, where firms are balancing robust profits with workforce reductions to boost efficiency and shareholder value.
Despite the significant job cuts, Microsoft has not indicated any slowdown in its strategic priorities. The company remains deeply invested in artificial intelligence, cloud computing, and enterprise software solutions. These areas continue to receive substantial funding and development attention, suggesting the layoffs are less about financial strain and more about restructuring for operational efficiency.
Industry analysts note that these layoffs reflect a broader trend among tech giants recalibrating after years of aggressive hiring. During the height of the pandemic-era digital boom, companies like Microsoft expanded rapidly to meet surging demand. Now, with economic pressures mounting and market competition intensifying, many are scaling back to prioritize agility and shareholder returns.
Microsoft has reassured investors that the cuts will not impact its core innovation goals. However, the move has sparked concern among employees and labor advocates about job security and the increasing pressure on remaining workers. As notices continue to go out, questions remain about how the restructuring will affect Microsoft’s culture and its long-term employee retention strategies.
