Microsoft Announces Major Layoffs Amid AI Investment Push
Microsoft has confirmed another massive round of layoffs, cutting approximately 9,000 jobs—about 4% of its global workforce—as the company doubles down on artificial intelligence and streamlines its operations. This move marks Microsoft’s largest layoff in over two years and comes on the heels of several other job cuts earlier in 2025.
Who’s Affected?
The layoffs are impacting employees across multiple divisions, but the Xbox gaming unit and related gaming studios like King (the team behind Candy Crush) have been hit especially hard. King is cutting about 200 roles, which is 10% of its staff. Other affected areas include product development, sales, marketing, and support teams, with job losses reported in Redmond, Bellevue, and other global offices.
Microsoft has already let go of over 6,000 employees earlier this year, with 305 more jobs cut in June. In total, the company has eliminated more than 15,000 roles in just the first half of 2025.
Why Is Microsoft Laying Off Workers Despite Strong Profits?
Even though Microsoft reported $26 billion in net income on $70 billion in revenue for the March quarter, the company is facing rising costs, especially due to its $80 billion investment in AI infrastructure for the 2025 fiscal year. The tech giant is reorganizing to cut costs, reduce management layers, and focus resources on areas seen as most strategic for future growth—mainly artificial intelligence and cloud computing.
A company spokesperson said,
“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace.”
The Human Impact
Affected employees have described the layoffs as sudden, with some reporting immediate loss of system access and no severance pay. The cuts span all levels of experience, from junior staff to senior managers, and come as a shock to many given Microsoft’s ongoing profitability.
The Bigger Picture: Tech Layoffs Across the Industry
Microsoft’s decision is part of a broader trend in the tech sector, where over 100,000 jobs have been lost globally in 2025 alone. Companies like Intel, Google, and Meta are also making deep cuts as they restructure for the AI era and try to maintain profit margins amid rising costs.
What’s Next for Microsoft?
Microsoft’s leadership, including new AI chief Mustafa Suleyman, is betting that heavy investment in artificial intelligence will reshape the company and the tech industry for decades to come. While these layoffs are hard for employees, Microsoft says they are necessary to stay competitive and innovative in a rapidly changing market.
For now, the tech world—and thousands of former Microsoft workers—wait to see if this gamble on AI pays off in the long run.