Microsoft Announces Plans to Lay Off 9,000 Employees Worldwide

What Happened?

Microsoft announced plans to lay off 9,000 employees worldwide in a move that will affect nearly 4% of the tech giant’s workforce. ‘We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,’ a Microsoft spokesperson said in an email.

The layoffs are a continuation of a year-long trend for Microsoft. Microsoft cut 6,000 jobs in May and then 300 more in June. In 2023, Microsoft laid off an estimated 10,000 workers. The firm currently employs 228,000 people.  

Why it Matters

Though Microsoft spokesmen have stated the move is intended to reduce the number of middle managers in the company. The cutbacks raise the question of whether or not at least one of the major tech giants has already begun to replace its human workforce with artificial intelligence.

There is some circumstantial evidence to support the idea that Microsoft is trimming its human workforce due to AI programs. For example, Microsoft’s AI product for coding and software development, known as Github Copilot, currently has 15 million users, and several Microsoft executives have made public statements praising the program’s efficiency and effectiveness.

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Other major tech companies have also begun hinting that they may soon start increasing the amount of work done by AI, which would lead to fewer human workers. Andy Jassy, CEO of Amazon, recently said he expects Amazon’s workforce to shrink in the coming years ‘as we get efficiency gains from using A.I. extensively across the company.’

There is another equally plausible explanation for the Microsoft cuts. Tech companies, including Microsoft, have also been trying to become leaner by reducing their internal bureaucracies, which means eliminating middlemen. In addition to middle management, software engineers and individual product managers were often prime targets for cutbacks at Microsoft.

The idea behind a leaner approach to business is to become more agile. As Jeff Bezos once remarked, it’s ok to fail, but the key is to fail faster. Meaning it’s acceptable to try new ideas and approaches, but if they don’t work that needs to be determined in the minimum possible amount of time. As opposed to something like the U.S. government, where failed programs continue on indefinitely. 

Overall Microsoft continues to perform well in the market. Its most recent report showed $70 billion in sales thus far for 2025, up 13% from 2024. Microsoft also retains a total valuation in excess of three trillion dollars.

How it Affects You

AI and a leaner approach to business have created a tighter market for technology workers. Where once tech jobs were plentiful, now they are harder to come by. If tech companies’ investments in AI pay off, the trend towards fewer human workers is likely to continue.