Microsoft is laying off around 7,000 employees, approximately 3% of its global workforce, as part of a broader cost-cutting strategy, CNBC reported on Tuesday. The layoffs will span various levels and geographies and mark the company’s most significant job reduction since 2023, when it let go of 10,000 workers.
While a smaller round of performance-related layoffs occurred in January, the current cuts are aimed at streamlining operations and reducing management layers. The tech giant is reallocating resources as it continues investing billions of dollars into artificial intelligence, a key focus of its future growth strategy.
As artificial intelligence emerges as a major growth engine, Big Tech has been pouring money into the space while slashing costs elsewhere to safeguard profit margins. Rival Google has also laid off hundreds of employees in the past year, as it looks to control costs and prioritise AI, media reports have said.
Microsoft’s reported move comes weeks after the company posted stronger-than-expected growth in its cloud-computing business Azure and blowout results in the latest quarter, calming investor worries in an uncertain economy. The company had a total of 2,28,000 workers, with 1,26,000 employees in the United States at the end of June last year, according to its annual filing with the US SEC.
(With inputs from Reuters)