Microsoft's 2025 layoff ledger: More than 15,000 jobs axed in seven months
According to CEO Satya Nadella, AI tools such as GitHub Copilot now generate nearly 30% of the company’s code, significantly reducing the need for traditional software engineering labour.
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In a year defined by record stock market performance and ballooning profits, Microsoft has quietly executed one of the most significant corporate restructurings in its history - eliminating more than 15,000 jobs in just the first seven months of 2025.
The layoffs, which now account for nearly 7% of Microsoft's 228,000-person global workforce, are not the product of financial distress.
Read More: Microsoft tightens focus on AI proficiency amid mass layoffs; says "AI is core to every role"
Instead, it is a realignment to fund an $80 billion push into artificial intelligence (AI) infrastructure and to reshape the company's internal cost dynamics.
A systematic downsizing
Microsoft's 2025 workforce reduction was neither sudden nor isolated. It unfolded in deliberate stages, each building toward a stepping transformation:
- January 2025: Roughly 1% of staff let go during the annual performance review cycle.
- May 2025: The company cut around 6,000 roles, primarily in product and engineering.
- June 2025: About 305 employees were laid off, mostly at Redmon headquarters.
- July 2025: The most significant wave - 9,000 employees - was announced, affecting approximately 4% of the total workforce.
The AI-first agenda
According to CEO Satya Nadella, AI tools such as GitHub Copilot now generate nearly 30% of the company's code, significantly reducing the need for traditional software engineering labour, reports suggest.
By slashing headcount, Microsoft is redirecting resources from payroll to processors - investing in AI data centers, advanced chips, and the core technologies that will underpin its next era.
Gaming Division cuts
The toll has been particularly harsh in Microsoft Gaming. The division is being "harvested" to fund the AI engine.
Studios such as The Initiative have been shuttered. High-profile game titles like Perfect Dark and Everwild have been cancelled. The focus has shifted away from bespoke AAA games to a streamlined Game Pass-driven model, leveraging existing IP rather than creating new ones.
Strategic layoffs: A pattern repeated
Microsoft's 2025 restructuring continues a pattern of strategic layoffs across its recent history:
- 2014: 18,000 jobs cut (14%) post Nokia, enabling the "mobile first, cloud first" shift.
- 2023: 10,000 roles eliminated to integrate Activision Blizzard.
- 2024: Nearly 2,000 jobs slashed in Xbox and related divisions to align with ongoing gaming consolidation.
Each wave was tied to a pivot. But 2025 stands apart in both scale and focus. This is not just a reset - it is a complete reimagining of Microsoft's future.
