Microsoft Reduces Workforce By 3%, Aims For Leaner & Faster Operations

Microsoft is letting go of about 6,000 employees, which is around 3 per cent of its total workforce. The layoffs are happening across different teams, levels, and countries. This is one of the largest rounds of job cuts by the company since it cut 10,000 jobs in 2023.

Despite this, Microsoft recently posted strong earnings of USD 25.8 billion in net income for the quarter. The company also gave a positive outlook for future growth, especially in areas like cloud computing and artificial intelligence (AI).

Why the Layoffs?

According to Microsoft, these job cuts are not because of poor performance. Instead, the company is making changes to become more efficient. One main goal is to reduce the number of management layers to speed up decision-making and stay competitive.

This move is similar to what Amazon did earlier this year, cutting roles that added extra layers to their teams. Microsoft’s changes are meant to help it adjust to a rapidly changing tech market.

Focus on AI and Cloud

CEO Satya Nadella said in January that Microsoft needs to make changes in its sales approach. This came after slower-than-expected growth in its Azure cloud business that wasn’t related to AI. However, AI-related cloud services grew faster than expected.

Nadella said the company must now focus on “new design wins,” meaning it needs to work differently to match new technology trends like AI, and not just stick to old methods.

Stock Prices and Company Size

Microsoft shares closed at USD 449.26 on Monday, the highest so far in 2025. The company had 228,000 employees at the end of June, and nearly 2,000 of those laid off were tied to its headquarters in Redmond, Washington.

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