Microsoft announced a significant reduction of its workforce on Tuesday, laying off approximately 6,000 employees, or 3% of its global workforce, as part of its broader strategy to reduce costs and accelerate its investments in artificial intelligence (AI).
The layoffs will affect employees across all levels, teams, and geographies, with a notable impact in Microsoft’s Redmond headquarters, where 1,985 positions are being eliminated. This move follows previous layoffs in 2023, including a major reduction of 10,000 jobs, as the company realigns its focus toward AI and cloud technologies, particularly the Azure cloud platform.
Despite these layoffs, Microsoft reported strong financial results, including $25.8 billion in quarterly net income. However, the large investments required to expand its AI infrastructure, including $80 billion in capital spending this fiscal year, have put pressure on profitability, causing cloud margins to narrow from 72% to 69% year-over-year.
