Microsoft announced on Wednesday that it will lay off nearly 4% of its global staff as part of its ongoing effort to manage costs while investing heavily in artificial intelligence infrastructure.
The company currently employs around 2,28,000 people worldwide, and had already laid off approximately 6,000 employees in May 2025. The latest round of job cuts signals further restructuring, particularly in sales and managerial roles, as reported by Bloomberg News last month.
According to Microsoft, the goal is to reduce organisational layers, simplify internal procedures, and streamline operations by trimming the number of managers and consolidating roles. The announcement was first reported by The Seattle Times earlier on Wednesday.
Despite its ambitious pledge to spend $80 billion in capital for fiscal year 2025, the rapid scaling of AI infrastructure is putting pressure on Microsoft’s margins. Analysts expect the company’s cloud services profit margin for the June quarter to shrink compared to last year, even as demand for AI solutions rises.
In a related move, Microsoft’s King division—which oversees the globally popular Candy Crush mobile game—is also undergoing cuts. According to Bloomberg, the Barcelona-based unit is laying off 10% of its workforce, or roughly 200 employees, as part of a targeted efficiency drive.
This round of layoffs places Microsoft in line with other major Big Tech firms who are also grappling with economic challenges and rising costs in the AI era.
Earlier this year, Meta, the parent company of Facebook, announced that it would cut approximately 5% of its lowest-performing employees. Google (Alphabet) has also been reducing its workforce, laying off hundreds of employees across different verticals over the past year.
At the same time, Amazon has continued to lay off more employees in various divisions, with its latest cuts affecting the books division. Notably, Amazon previously laid off staff in its devices and services divisions, as well as communications roles.
The broader pattern suggests economic instability and rising costs are forcing many large tech giants in the U.S. to take a more conservative view moving forward. These entities are caught between inflation pressures, interest rate fluctuations, and high levels of innovation spending, which is creating a need to consider implications on operational efficiency and staffing decisions.
For Microsoft, this move is an internal repositioning from a previous strategy to be aggressive about all-in AI innovation, while also considering profitability and simplification within their own organization. While AI is expected to be the future of tech, the current costs of development and architecture are posing a real threat.
As the company moves forward, it is dedicated to AI innovation, but disruptions, restructures, and more difficult decisions are going to be likely to come. For employees and visible watchers, this provides an even clearer reminder that not all organizations, regardless of size are insulated from economic reality and market demand shifts.
ALSO READ: Meta Threads Introduces Global DM Feature – But Is It Safe Without Encryption?
