Microsoft lays off 6000 employees, roughly 3 per cent of its current workforce

Tech giant Microsoft, on Tuesday, announced that it decided to lay off about 3 per cent of its workforce, with cuts being made across all levels and geographies. The layoffs are estimated to impact around 6,000 employees.

 

Microsoft had a total headcount of 228,000 full-time employees according to reports from last June. Out of them, a majority were based out of the United States. Microsoft Chief Financial Officer (CFO) Amy Hood said that the headcount done in March was around 2 per cent higher than that of the previous year.

 

Back in January, Microsoft announced a smaller round of layoffs based on employee performance. The new job cuts, however, were not related to performance, a Microsoft spokesperson told CNBC.

 

This announcement comes only a month after Intel laid off more than 21,000 employees in April. 

 

This marks the largest layoffs for the IT giant since 2023, when 10,000 employees were laid off. 

 

The move is aligned with the company’s aim to expand more into the artificial intelligence (AI) sector. Especially with the big tech companies spending generously on AI, cutting costs in other areas helps to shield their profit margins.

 

According to agencies, Microsoft set aside $80 billion in capital spending for the fiscal year to expand data centres that service its AI operations. 

 

Microsoft informed the state officials that the majority of the layoffs were concentrated towards their home state, Washington, with a striking 1,985 employees cut off from the Redmond Headquarters. 

 

The mass layoff follows weeks after Microsoft surpassed sales and profit expectations for the initial quarter, reassuring investors in these turbulent times for the tech industry.

 

On the April earnings call, Hood stressed the company’s focus on “building high-performing teams and increasing [Microsoft’s] agility by reducing layers with fewer managers”.

 

Although Microsoft is not directly impacted by President Trump’s tariffs, the company still needs to pay heed to the economic trends of the coming months and years. 

 

Economists, like Cory Stahle, told AP that the current Microsoft layoffs could be “an effort to think more long term.”

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