Microsoft is laying off thousands of employees, its third round of cuts in recent months, the company confirmed on Wednesday.
The staff reduction will affect less than 4% of the company’s total workforce, or around 9,000 workers, according to a company spokesperson. It marks the tech giant’s largest layoffs since it cut 10,000 employees in 2023 and comes amid workforce cuts elsewhere in the tech industry.
Microsoft’s stock was unchanged following the announcement.
“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement, adding that the company is reducing managerial layers and making employees more productive with new technologies.
The staff reduction also comes as tech companies, including Microsoft, are using artificial intelligence to make their workforce more efficient. Microsoft CEO Satya Nadella said earlier this year that 20% to 30% of the company’s code was being generated by AI, and the company is pouring billions into AI infrastructure investments.
It’s unclear whether AI directly contributed to Wednesday’s cuts and which Microsoft divisions will be affected. The Verge reported that Xbox leader Phil Spencer sent an internal note saying that his staff would be affected. Bloomberg also previously reported that the planned July layoffs would target the sales and Xbox teams.
Wednesday’s cuts come after Microsoft laid off 3% of its staff, roughly 7,000 employees, in May.
As of July 2024, the last time Microsoft formally reported its total headcount, the company employed 228,000 workers.
Other tech companies have also conducted layoffs this year, including Meta and Bumble. Amazon CEO Andy Jassy also warned his staff last month that AI would eventually help the company reduce headcount.
Microsoft said in April that its quarterly profits had increased 18% to $25.8 billion during the three months ended March 31, on the back of strong performance for its cloud business and AI services. The company is expected to release earnings for its fiscal fourth quarter later this month.
Read the full article here