Nearly three months after celebrating its 50th anniversary, Microsoft is laying off about 4% of its workforce, the company said Wednesday.
The tech giant intends to reduce organizational layers by having fewer managers and streamlining its products, procedures and roles, Microsoft said, according to Reuters.
The layoffs, which will affect employees across different teams, geographies and levels of experience, come on the second day of Microsoft’s 2026 fiscal year, CNBC reported, citing a person familiar with the matter.
“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said, per CNBC, the Associated Press and the Seattle Times.
Microsoft began sending out layoff notices to employees on Wednesday, July 2, according to the AP. The cuts will impact roughly 9,000 workers, CNBC and the Seattle Times reported.
USA TODAY has reached out to Microsoft.
What may be behind the layoffs?
According to Reuters, the layoffs may be attributed to Microsoft’s desire to cut costs as it continues to invest heavily in artificial intelligence.
Microsoft pledged $80 billion in capital spending for its fiscal year 2025. However, the increasing cost of its AI infrastructure has impacted its margins, with its June quarter cloud margin expected to shrink from last year, Reuters reported.
Other big tech companies, which are investing heavily in artificial intelligence, have also decided to lay off workers. Facebook parent Meta said earlier this year that it would lay off about 5% of its “lowest performers”, while Alphabet’s Google has also laid off hundreds of employees in the past year.
Microsoft’s previous rounds of layoffs
Microsoft announced in May that it would lay off around 3% of its entire workforce, with CNBC and The Verge reporting the decision would affect roughly 6,000 employees. In January, Microsoft cut less than 1% of its employees based on performance, CNBC reported.
“At Microsoft we focus on high-performance talent,” a Microsoft spokesperson told CNBC in January. “We are always working on helping people learn and grow. When people are not performing, we take the appropriate action.”
Other notable layoffs from Microsoft occurred in 2023, when the company cut 10,000 jobs, and in 2014, when the company eliminated 18,000 jobs following the acquisition of Nokia’s devices and services business.
According to Microsoft’s website, it employs about 228,000 workers around the world, including 126,000 in the U.S. as of June 2024.
Contributing: Melina Khan, USA TODAY and Reuters
Jonathan Limehouse covers breaking and trending news for USA TODAY. Reach him at JLimehouse@gannett.com.
This article originally appeared on USA TODAY: Microsoft layoffs: Nearly 4% of workforce cut
