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Microsoft cuts 3% of its global workforce. This is the latest job cuts at major technology companies, seeking to streamline the operational and elevation layers of middle managers.
The Redmond, Washington-based group said Tuesday it would eliminate roughly 6,000 roles, including its international office and wholly owned subsidiaries such as LinkedIn. The move follows performance-related employment cuts that affected around 2,000 Microsoft employees this year.
“We continue to implement the organizational changes necessary to make the most of our company to succeed in a dynamic market,” the company said in a statement.
Microsoft has joined Amazon, Meta and others to eliminate thousands of roles as technology companies continue to readjust their workforce amid heavily invested in artificial intelligence and increased competition with startups, including Openai.
Meta branded about 5% of the company’s low performance before firing them this year. The company says it has already cut nearly a quarter of its employees in the past few years in a regulatory submission that it had around 74,000 employees at the end of 2024.
Amazon chief Andy Jassy said last year the company was striving to “eliminate the bureaucracy” and pursues a flatter structure with fewer middle managers. The e-commerce giant eliminated 27,000 roles in two major job cuts in 2023, but Amazon Web Services cut hundreds of roles in 2024.
Microsoft has praised the strong growth in the cloud sector, recording better revenue than expected in the three months leading up to the end of March. Its stock has surpassed its peers since the beginning of this year, and the software giant has recently regained the title of the world’s most valuable company.
Chief Financial Officer Amy Hood told investors last month that Microsoft is focusing on “building and agile teams by reducing the number of layers with fewer managers.”
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The company cut around 2,500 roles from its Xbox gaming units last year after the acquisition of publisher Activision Blizzard. Over the same period, we reduced approximately 1,000 roles across Hololens augmented reality headsets and Azure Cloud Computing units.
In 2023, Microsoft said it would let go of its 10,000 employees due to slow revenue growth.
Microsoft did not confirm whether Tuesday’s announcement was driven by AIRED’s efficiency, but CEO Satya Nadella said earlier this year that 20-30% of the company’s codes were created using these tools.
RBC analyst Rishi Jaluria said the job cuts represent counterweights in AI infrastructure spending and while he was hoping to continue to grow this year, he expects increased efficiency to slow down the pace.
“These quasi-conglomerates have too many layers,” Jarlia said.
