Latest Round of Microsoft Layoffs Affects About 6,000 Workers

Microsoft is laying off around 6,000 workers. According to the company, the job reductions will affect employees at every level and will eliminate various layers of management.

Microsoft said the structural changes are necessary as it navigates a “dynamic marketplace.” The latest round of layoffs, which represents less than 3% of the tech giant’s total workforce, will be the largest since the company laid off 10,000 employees two years ago.

The job reduction announcement comes just a few weeks after the company released better-than-expected quarterly earnings, particularly through the growth of its cloud business, Azure. However, heavy investment in AI has eroded its profit margins.

Gil Luria, an analyst with D.A. Davidson, told Reuters that job reductions typically happen when profit is squeezed from increased investments. The analyst even hinted at more layoffs.

“We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000 in order to make up for the higher depreciation levels due to their capital expenditures,” he said.

Ironically, even executives involved with AI support and development were not spared Microsoft’s layoffs. Gabriela de Queiroz, director of artificial intelligence for startups, was let go by the company.

💔 Bittersweet news to share: I was impacted by Microsoft’s latest round of layoffs. pic.twitter.com/QPwYJvjQkC

— Gabriela de Queiroz (@gdequeiroz) May 13, 2025

Microsoft Reported Strong Earnings in Q3

At the end of April, Microsoft released third-quarter earnings. Revenue for the period reached just over $70 billion, a 13% increase over the same quarter last year.

The company’s Azure business jumped 33%, with AI innovation leading the majority of the growth. Microsoft’s Intelligent Cloud segment, which encompasses Azure, brought in $26.8 billion in revenue.

Climbing 10%, the software maker’s Productivity and Business Processes group, which includes Office subscriptions, earned nearly $30 billion in the quarter. The More Personal Computing unit made $13.4 billion in revenue.

While the Washington company recently raised the price on its Microsoft 365 suite of software, it also shut down video chat app Skype. The service, which pioneered video call technology, was purchased by the company over a decade ago. However, competitors like Zoom and Google Meet have edged Skype out with more features and improved security.

Employees affected by these layoffs are currently being notified. As of June 2024, the company employed around 228,000 people worldwide.