WASHINGTON – Starting Wednesday, Microsoft is cutting nearly 4% of the company’s total workforce, or around 9,000 workers. It’s the Tech Giant’s second-largest layoff since it laid off 10,000 employees in 2023, and comes after a 3% staff cut in May.
Xbox divisions are the main target of the layoffs, evident from recent game cancellations and studio closures. Xbox leader Phil Spencer confirmed that his staff has substantially decreased.
Sales and marketing teams will also take a hit. The latest cut will focus on customer-facing roles, where nearly 20% of employees worked as of 2024. In Northern Virginia, the majority of Microsoft employees work in sales.
Microsoft’s CFO noted that Management layers will also be trimmed in this latest cut. Unlike the May layoffs, which hit engineering and product management, this round seems to spare those branches.
Previously, staff affected by layoffs received outplacement support, severance, or reassignment options from Microsoft.
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The layoffs come after Microsoft implemented artificial intelligence in its workforce to increase efficiency. CEO Satya Nadella said 20% to 30% of the company’s code was being generated by AI, and the company is investing billions into AI technology. The transition has been profitable, with Microsoft making $25.8 billion in profit last quarter, up 18%.
Many tech companies are making notable layoffs, with Bumble, Amazon, and Meta all making cuts.
