Microsoft Announces 9,000 Layoffs – Second Major Cut This Year as AI Investment Ramps Up
Redmond, WA – July 3, 2025 – Microsoft is enacting another round of important layoffs, impacting approximately 9,000 employees globally.This marks the tech giant’s second major workforce reduction in recent months and the largest in over two years, signaling a strategic shift as the company aggressively invests in Artificial Intelligence (AI).
The cuts, announced wednesday, will affect multiple divisions including the Xbox video game business, sales, and other teams worldwide. A notice filed with Washington state officials confirms 830 Redmond-based employees will be impacted.This latest reduction represents roughly 4% of Microsoft’s workforce, which stood at 228,000 as of June 2024.
This announcement follows a previous layoff in May that saw approximately 6,000 positions eliminated – nearly 3% of the global workforce and the largest job cuts in over two years. combined with earlier cuts this year, including 300 positions in Redmond and nearly 2,000 in the Puget Sound region, the total number of jobs lost in 2025 is significant.
Microsoft frames these cuts as part of a broader restructuring aimed at increasing agility and efficiency. According to a memo from Xbox CEO Phil Spencer,the changes will “position the video game business for enduring success and allow us to focus on strategic growth areas” by “removing layers of management.” Chief Financial Officer Amy Hood echoed this sentiment in an April earnings call, stating the company is focused on “building high-performing teams and increasing our agility by reducing layers with fewer managers.”
However, the timing of these layoffs coincides with massive investments in AI infrastructure – including data centers and specialized computer chips – anticipated to cost the company around $80 billion in the last fiscal year. This has fueled speculation that Microsoft’s own AI-powered coding tools may be reducing the need for human programmers, though the company has not directly addressed these concerns.
Further Reading:
Trump’s Tariffs Could Trigger More Layoffs: [[1]]
Previous microsoft Layoffs (May 2025): [[1]]
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