Big Tech Layoffs: Microsoft to lay off 9,000 people in bid to rein in costs amid AI push

Microsoft will cut about 9,000 jobs, its second major round of layoffs this year, as the technology giant moves to streamline operations and rein in costs while investing heavily in artificial intelligence. The reductions, which represent less than 4 percent of Microsoft’s global workforce, will affect employees across teams, regions and levels of seniority, according to reports.

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Microsoft said the reductions would affect teams across its global operations, including its sales organization and Xbox gaming division.

“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” the company said.

The layoffs, which follow the elimination of about 6,000 positions in May, come as Microsoft, like many of its peers, confronts the ballooning costs of competing in the AI arms race. The company has spent tens of billions of dollars on data centers and infrastructure to support its ambitions in artificial intelligence, even as it has pledged that it would remain disciplined on expenses.

As previously reported, the latest layoffs would target sales teams and divisions including Xbox. Microsoft had 228,000 employees at the end of June 2024, including 45,000 in sales and marketing roles.

Amidst these layoffs, the company’s top sales executive, Judson Althoff, is set to begin a two-month sabbatical in July. Microsoft has said the leave was previously planned and that Althoff is expected to return in September.

Read more: Microsoft to lay off hundreds in Xbox division amid restructuring push