Microsoft announced on Tuesday it is laying off less than 3% of its global workforce, around 6,000 employees, as the company aims to control costs while ramping up its multibillion-dollar investments in artificial intelligence.
The job cuts, spanning all levels and regions, are the largest since Microsoft laid off 10,000 employees in 2023. The company, which had 228,000 employees as of June last year, said the layoffs are part of ongoing efforts to align staffing with strategic priorities.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said.
The move comes shortly after Microsoft reported strong quarterly earnings, driven by robust growth in its Azure cloud business. However, expanding AI infrastructure has pressured profit margins. Microsoft Cloud’s margin fell to 69% in the March quarter, down from 72% a year earlier.
To support its AI ambitions, Microsoft has earmarked $80 billion in capital expenditures for the fiscal year, primarily to expand data centers and address capacity constraints for AI services.
Despite strong revenue performance, the company is tightening operations to offset rising depreciation costs associated with its AI expansion. Analysts note that job reductions may be a recurring measure as Microsoft manages the financial impact of its aggressive AI push.
