Microsoft sacking 9,000 employees in second major layoff after cutting 6,000 jobs in May

Microsoft Corp. has started a new round of job cuts affecting as many as 9,000 employees, marking its second major wave of layoffs this year as the tech giant looks to rein in costs amid hefty investments in artificial intelligence infrastructure.

According to a Bloomberg report, citing a company spokesperson, the cuts will impact less than 4% of Microsoft’s global workforce and will span across across teams, geographies and tenure.

The move is aimed at streamlining operations and reducing layers of management, the spokesperson added.

“We continue to implement organisational changes necessary to best position the company and teams for success in a dynamic marketplace,” Bloomberg quoted the spokesperson as saying.

Microsoft’s latest round of layoffs, first reported by Bloomberg, is expected to impact thousands of employees this July, with a focus on sales staff and divisions such as Xbox.

This follows a previous round of cuts in May, which affected around 6,000 workers, primarily in product and engineering roles.

As of June 2024, Microsoft employed approximately 228,000 people, including 45,000 in sales and marketing. The company often announces organisational changes and team restructurings near the close of its fiscal year in June.

According to a Reuters report, the Windows maker had pledged $80 billion in capital spending for its fiscal year 2025.

However, the soaring cost of scaling its AI infrastructure has weighed on its margins, with its June quarter cloud margin expected to shrink from last year, added the report.

Big Tech peers, which are investing heavily in artificial intelligence, have also announced job cuts.

Facebook parent Meta earlier this year said it would trim about 5% of its “lowest performers”, while Alphabet’s Google has also laid off hundreds of employees in the past year.

Amazon has also cut jobs across its business segments, most recently in its books division. The company had earlier laid off employees in its devices and services unit, and communications staff.

Economic uncertainties and rising costs have triggered layoffs across sectors in Corporate America, as companies rush to streamline operations and hedge against further cost pressures.

With inputs from agencies