On July 2, 2025, Microsoft announced a workforce reduction, laying off approximately 9,000 employees, nearly 4% of its global workforce. This follows an earlier reduction of 6,000 employees in May 2025.
The latest layoffs affect multiple divisions, including sales and the Xbox gaming unit. This reflects Microsoft's strategic shift toward artificial intelligence (AI) and operational efficiency.
The company is streamlining operations and reducing managerial layers. Microsoft is also investing heavily in AI-driven infrastructure, allocating $80 billion in the fiscal year ending June 2025 for AI-driven infrastructure like data centers.