Key facts
- Microsoft is laying off approximately 4,800 employees, or 2.1% of its global workforce.
- The job cuts primarily affect the sales and Xbox divisions.
- The company is reorienting its investments and resources towards AI infrastructure and evolving customer needs.
- Microsoft previously offered a voluntary retirement program that saw over 30% of eligible employees participate.
- Over 4,000 employees have been redeployed into new roles within Microsoft in the past year.
Microsoft announced on Monday that it plans to lay off approximately 4,800 employees, which represents 2.1% of its global workforce. The majority of these job reductions will impact the sales and Xbox gaming organizations, according to an internal email from Microsoft HR chief Amy Coleman.
These layoffs come as Microsoft is heavily investing in AI infrastructure and facing investor concerns about the impact of AI on traditional software. The company is rebalancing its operations, trimming its workforce to offset AI investments and operate more efficiently, a trend seen across Big Tech. Earlier this year, Microsoft offered a voluntary retirement program to eligible employees, which was utilized by over 30% of those who qualified.
In the internal memo, Coleman stated that the business is changing due to the evolving technological landscape and shifting customer needs, necessitating adjustments in resources, roles, and organizational structure. She emphasized that the eliminated roles are not being replaced by AI, but AI is changing how work is done, requiring employees to continuously learn and adapt. The company aims to make hard changes to build differentiated products and services, supporting affected employees with financial assistance and resources.