Microsoft has announced plans to lay off up to 9,000 employees in its latest round of job cuts for 2025. This move brings the total number of layoffs this year to 15,000, following 6,000 job cuts in May. The reductions represent about 4% of Microsoft’s 228,000-strong global workforce.
While the company hasn’t specified which departments will be most affected, reports suggest that its Xbox gaming division could face significant cuts.
Why Is Microsoft Cutting Jobs?
Microsoft is aggressively investing in artificial intelligence (AI), allocating $80 billion (£68.6 billion) to build massive data centers for AI model training. A company spokesperson told the BBC:
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace.”
This restructuring reflects a broader trend in Big Tech, where companies are shifting resources toward AI innovation while scaling back in other areas.
Where Are the Layoffs Happening?
According to an official Washington state database:
- Over 800 job cuts will be concentrated in Redmond and Bellevue, key Microsoft hubs.
Microsoft’s AI Ambitions
In recent years, Microsoft has doubled down on AI, including:
- Investing in data centers and AI chips
- Hiring British AI pioneer Mustafa Suleyman to lead its Microsoft AI division
- Deepening ties with OpenAI, the creator of ChatGPT (though reports suggest tensions between the two companies)
A top Microsoft executive recently told the BBC that the next 50 years will be “fundamentally defined by AI,” transforming how we work and interact.
Challenges in Selling AI Tools
Despite heavy investments, Microsoft has reportedly struggled to sell its AI assistant, Copilot, to businesses—many workers still prefer ChatGPT.
The AI Talent War in Big Tech
As Microsoft trims its workforce, other tech giants are aggressively recruiting top AI talent:
- Meta (Facebook, Instagram) is poaching experts to build a “superintelligence” lab, with CEO Mark Zuckerberg personally involved in hiring.
- OpenAI’s Sam Altman revealed that some of his team members received $100M+ signing bonuses from Meta.
- Amazon’s Andy Jassy recently stated that AI could replace some jobs at the company.
Final Thoughts
Microsoft’s layoffs highlight the tech industry’s pivot toward AI, even as companies face challenges in monetizing these tools. With AI reshaping the workforce, job cuts may continue as businesses prioritize automation and next-gen tech.
