Microsoft Corporation has initiated one of its largest workforce reductions since 2023, confirming the layoff of more than 6,000 employees globally. The decision, announced on May 13, affects approximately 3% of the company’s global workforce, with job cuts spanning key departments including engineering, product, LinkedIn, and Xbox.
Strategic Shift Toward AI and Efficiency
The company stated that the layoffs are part of an ongoing effort to restructure operations, reduce management layers, and redirect resources toward strategic areas such as artificial intelligence (AI) and cloud computing.
“Organizational and workforce adjustments are a necessary and regular part of managing our business,” a Microsoft spokesperson said. “We will continue to prioritize areas that drive the most value for our customers.”
Despite maintaining strong financial performance and a market capitalization exceeding $3 trillion, Microsoft has accelerated internal realignments to streamline its teams and focus on high-growth segments.
Timeline and Background
This is Microsoft’s second significant round of layoffs in the past two years. In early 2023, the company cut approximately 10,000 jobs, citing macroeconomic concerns and changing customer demand. Earlier in 2025, a smaller performance-based workforce adjustment also took place.
The newly announced layoffs follow the closure of select business functions and reassignments within teams impacted by recent acquisitions and product shifts.
Divisions Affected
Sources familiar with the matter confirmed that the current layoffs affect:
- LinkedIn, Microsoft’s professional networking platform
- Xbox and Gaming, including roles from the post-Activision Blizzard integration
- Cloud & AI, in efforts to reallocate toward advanced AI development
- Marketing and Product Teams, as part of structural reshuffling
Industry-Wide Trend
Microsoft joins several major tech firms, including Amazon, Google, and Meta, in executing workforce reductions as they reposition themselves for the AI-dominated future. According to data from Layoffs.fyi, over 220,000 tech jobs have been lost globally since the beginning of 2022.
Analysts suggest that while the layoffs are significant, they reflect a growing industry trend of optimizing workforce structures to adapt to next-generation technologies.
Employee Reactions
Internal sources described the mood within the company as “sombre,” with several employees receiving notifications without prior notice. Many impacted staff members shared messages of gratitude and farewell on LinkedIn and other platforms.
Outlook
Microsoft has reaffirmed its commitment to hiring in critical areas such as artificial intelligence, cloud infrastructure, and security, signaling that while some roles are being eliminated, others are being created to meet future demands.
The company is also expected to continue investing in partnerships and technologies related to generative AI, particularly its collaborations with OpenAI.
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