Microsoft has announced that it will lay off about 9,000 employees—nearly 4% of its workforce—in a second major wave of layoffs on Wednesday, July 2, according to a Reuters report.
The move will have an impact across teams, geographies and tenure, as the tech giant looks to reduce organisational layers with fewer managers and streamline its products, procedures and roles.
Microsoft has confirmed that the layoffs have impacted employees within its gaming division, which employs more than 20,000 staff. However, the company did not provide further details.
Separately, Bloomberg News reported that its Stockholm-based King division, which makes Candy Crush, is cutting 10% of its staff, or about 200 jobs. Other European offices, such as ZeniMax, also began laying off employees early Wednesday, alongside cancelling several major gaming projects in development for years.
Microsoft’s move marks its second major wave of job cuts this year, following a round in May that affected 6,000 employees, primarily in sales and engineering roles. As of June 2024, it employed approximately 228,000 people globally.
The tech giant’s latest round of layoffs comes as the company looks to trim costs amid aggressive investments in artificial intelligence (AI) infrastructure.
Earlier in January, the Windows maker had allocated US$80 billion for its 2025 fiscal year to build AI data centres. However, the escalating cost of expanding its AI infrastructure has put pressure on its margins, with Microsoft projecting a year-over-year decline in its cloud margin for the June quarter.
Other tech giants that have also been investing heavily in AI have announced job cuts in recent months.
Meta announced earlier this year that it would cull about 5% of its “lowest performers,” while Google has laid off hundreds of employees since last June. Amazon, on the other hand, has also cut more than 27,000 jobs since the start of 2022, and announced smaller, more targeted layoffs in its retail, devices and communications units in recent months.
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Featured Image Credit: Microsoft
