Microsoft To Cut 9,100 Jobs In Biggest Layoff Since 2023 Amid AI-Driven Cost Pressures: Report

Microsoft (MSFT) is reportedly preparing its biggest round of layoffs in nearly two years, cutting roughly 4% of its global workforce, or about 9,100 jobs, in a bid to control costs.

Microsoft’s stock edged 0.14% lower after the opening bell on Wednesday following the news. On Stocktwits, retail sentiment around the company was in ‘bearish’ territory amid ‘high’ levels of chatter.

According to a CNBC report, the move will span across different teams, geographies, and levels of experience. These cuts mark the biggest staff reduction since 2023, when the tech giant fired over 10,000 people, and they follow a series of smaller layoffs earlier this year. 

In May, Microsoft announced layoffs affecting approximately 6,000 employees. While the latest round will target roles across multiple divisions, Bloomberg previously reported that sales teams could be hit particularly hard. It added that the company has already outsourced some sales functions for small and mid-sized businesses to third-party firms.

The company had 228,000 workers at the end of June 2024. Around 45,000 of them were employed in sales and marketing.

Employees of Microsoft’s gaming division, Xbox, have already started getting their pink slips. According to a Bloomberg report, Xbox is cutting down on around 10% of its staff, which accounts for around 200 jobs. 

“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson told CNBC.

Reports suggest that the layoffs at Microsoft are driven by the need to manage high costs associated with the company’s massive investments in AI-powered services and data centers. The company is looking to reduce operational costs in other areas to maintain margin stability to focus on growth in AI and cloud computing. 

Microsoft’s stock has gained more than 15% this year and around 8% over the past 12 months. 

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