Microsoft (MSFT) is laying off about 3% of its workforce, its largest headcount cut in more than two years.
The layoffs have not been formally announced via press release or SEC filing but were first reported on Tuesday. A Microsoft spokesperson confirmed to CNBC that it’s laying off about 3% of its global workforce.
With around 228,000 employees worldwide, the move will impact nearly 7,000 people — making it the company’s largest round of layoffs since it cut 10,000 roles in early 2023.
Microsoft framed the move as part of “organizational changes necessary to best position the company for success in a dynamic marketplace.” (What, not “vibrant” or “robust”?)
Unlike a smaller round of performance-based cuts in January, these layoffs are not tied to individual performance. A Microsoft spokesperson said the company is working to reduce layers of management and adjust its structure amid ongoing platform shifts.
The news comes just weeks after Microsoft delivered what Wedbush dubbed an “Aaron Judge-like” earnings performance that helped reset the narrative around AI monetization.
Revenue hit $70.1 billion, up 13%, with Azure and other cloud revenue growing 33% year-over-year, a better clip than some analysts predicted. Nearly half of that cloud growth came from AI workloads.
Microsoft stock is up around 6% year to date, and up over 200% since the pandemic-era stock lows of 2020.
The tech industry has been through a sweeping labor reset since 2023, when giants like Amazon (AMZN), Meta (META), and Google (GOOGL) began unwinding what some observers believed was pandemic-era overhiring.
Amazon cut more than 27,000 roles in waves, Meta laid off over 21,000 employees during its so-called “year of efficiency,” and Microsoft eliminated 10,000 positions, marking its biggest workforce reduction in years. Google’s parent company Alphabet let go of 12,000 employees, while Salesforce (CRM), Spotify (SPOT), and Lyft (LYFT) also trimmed deeply.
By 2024, layoffs grew more selective as leadership leaned into artificial intelligence and long-term profitability. Mass cuts gave way to more surgical trims, with companies saying sayonara to low-priority initiatives or those misaligned with fresh strategic visions. Meta pulled back in Reality Labs and infrastructure, Amazon slimmed down parts of AWS and retail tech, and Salesforce restructured to “focus on the core,” often shorthand for shedding teams that no longer fit the investor story.
While the headline-grabbing rounds mostly subsided, the pruning seems to have never really stopped. Tech firms have quietly kept reshaping their org charts, thinning layers, and reallocating headcount toward AI-driven bets. White-collar workers’ group chats everywhere remain alight with news of cuts or threatened cuts. Tuesday’s move by Microsoft slots cleanly into the narrative.
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