Microsoft to lay off 3% of workforce, report says
Microsoft plans to lay off approximately 7,000 employees, representing 3% of its workforce, as part of a strategic initiative to reduce costs and invest heavily in artificial intelligence. This move marks one of the largest reductions since 2023, with job cuts spanning all levels and geographical locations, focusing particularly on management layers. Despite recent strong performance in its cloud-computing division, Azure, Microsoft is committed to AI as a major growth area, aligning with industry trends where cost-cutting accompanies substantial investments in AI technologies. Other tech giants, like Google, have similarly reduced their workforce to prioritize AI development. These layoffs follow a smaller set of dismissals earlier in the year for performance-related reasons and have slightly affected Microsoft's stock value in the market.
Context:
Microsoft plans to lay off approximately 7,000 employees, representing 3% of its workforce, as part of a strategic initiative to reduce costs and invest heavily in artificial intelligence. This move marks one of the largest reductions since 2023, with job cuts spanning all levels and geographical locations, focusing particularly on management layers. Despite recent strong performance in its cloud-computing division, Azure, Microsoft is committed to AI as a major growth area, aligning with industry trends where cost-cutting accompanies substantial investments in AI technologies. Other tech giants, like Google, have similarly reduced their workforce to prioritize AI development. These layoffs follow a smaller set of dismissals earlier in the year for performance-related reasons and have slightly affected Microsoft's stock value in the market.
Dive Deeper:
Microsoft is set to lay off 7,000 employees, which constitutes 3% of its global workforce, as the company aims to cut costs and channel funds towards artificial intelligence development.
The layoffs are part of a broader strategy to streamline operations by reducing management layers across various levels and regions, marking the largest such move since a 10,000 employee reduction in 2023.
In recent months, Microsoft has demonstrated strong financial performance, particularly in its cloud-computing sector, Azure, which exceeded growth expectations and helped assuage investor concerns.
The company's strategic shift aligns with a broader industry trend where major tech firms are making substantial investments in AI while seeking to maintain profitability through workforce reductions.
Google, another tech giant, has also undertaken significant layoffs to manage costs and prioritize AI, indicating a common direction among leading technology companies.
The decision to lay off employees is distinct from previous performance-related dismissals earlier in the year, and Microsoft's stock experienced a minor decline following the announcement.
At the end of the previous fiscal year, Microsoft reported having 228,000 employees, with a significant portion based in the United States, highlighting the global scale of its operations.