Microsoft has announced another wave of job cuts, laying off 9,000 employees across various departments. This brings the tech giant’s total layoffs in 2025 to over 15,000 marking one of the most significant workforce reductions in the company’s history. The latest around, confirmed in early July, affects about 4% of Microsoft’s global workforce, which stood around 228,000 as of mid 2024.
This marks the third round of job cuts this year, following earlier layoffs in January and May that targeted thousands of roles across business units, including engineering, customer support and human resources.
Gaming, Sales And Marketing Teams Hit Hard
According to internal sources and media reports, the July layoffs impacted Microsoft’s gaming division the most. Studios under Xbox, including King and ZeniMax (both acquired as part of the Activision Blizzard deal), experienced deep cuts. The sales and marketing teams also saw a significant number of roles eliminated globally, with oer 800 employees affected at Microsoft’s Redmond headquarters alone.
Employees in middle management roles across multiple departments were also let go, as the company continues to flatten its organizational structure to improve agility.
Why Microsoft Is Making These Cuts
Despite strong earnings, the company is repositioning for the future. The tech giant is redirecting its focus and resources toward artificial intelligence, cloud services and infrastructure.
Executives have explained that the layoffs are part of a strategic effort to invest heavily in AI development. The company plans to spend upwards of $80 billion in 2025 on building data centers, acquiring specialized chips and scaling Copilot AI products across Microsoft 365 and Azure.
Xbox head Phil Spencer reportedly told staff the decision was difficult but necessary to “increase agility and focus”. Judson Althoff, Microsoft’s Executive Vice President of Worldwide Commercial Business, also began a sabbatical in the wake of the restructuring.
Reactions From Staff And Industry
The latest cuts have drawn emotional responses from Microsoft employees and observers in the tech industry. Many took to social media and forums like Reddit to express frustration, especially given Microsoft’s profitability. One user wrote, “So over 15k people laid off this year alone?” Another added, “It’s a bloodbath”.
Industry analysts argue that while Microsoft’s layoffs seem harsh, they align with a broader industry trend. As major tech firms shift from legacy systems to AI-powered solutions, many are trimming traditional roles to hire talent in more specialized, forward-looking areas.
What’s Next For Microsoft?
Microsoft insists that these cuts are not a sign of trouble, but a strategic realignment. The company is still hiring in AI-related roles, particularlyin regios like India where it is expanding its infrastructure and developer support teams.
More reshuffling may follow especially as Microsoft deepens its partnerships with OpenAI and other AI companies. However, leadership has promised transparency and support for affected workers, offering severance, career counseling and job placement services.
With over 15,000 layoffs this year alone, Microsoft’s restructuring reflects the high stakes of staying competitive in an AI-driven world. While painful for thousands of employees, the company sees these changes as necessary for long-term innovation and growth. As Microsoft continues its pivot to AI, the next chapter in its transformation will likely define its place in the future.
