Microsoft has announced plans to lay off up to 9,000 employees—about 4% of its global workforce—as it ramps up its investment in artificial intelligence (AI) and adapts to a rapidly evolving tech landscape.
The company, which employs approximately 228,000 people worldwide, did not specify which departments would be affected. However, reports suggest that the Xbox gaming division may be among those impacted. A company spokesperson stated, “We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace.”
This marks Microsoft’s fourth round of layoffs in 2025. In May, the company let go of 6,000 workers, and filings with Washington State show more than 800 additional positions will be cut in Redmond and Bellevue—key locations for Microsoft’s operations.
The job cuts come as Microsoft intensifies its AI strategy, with an $80 billion investment in building large-scale data centers to support AI model training and development. The tech giant has made AI a cornerstone of its future, including the recruitment of British AI pioneer Mustafa Suleyman last year to lead its new Microsoft AI division.
A senior executive recently emphasized the company’s commitment, stating that AI will “fundamentally define the next half-century,” transforming both human interaction and the nature of work.
Microsoft also maintains a major investment in OpenAI, the developer of ChatGPT. However, reports indicate growing tension between the two companies. According to Bloomberg, Microsoft’s AI assistant, Copilot, has struggled to gain traction among business users, many of whom continue to prefer ChatGPT.
The layoffs come amid a broader wave of restructuring across the tech industry as companies compete for elite AI talent. Meta, for example, has reportedly offered signing bonuses exceeding $100 million to lure top AI researchers, with CEO Mark Zuckerberg personally involved in recruitment. OpenAI CEO Sam Altman confirmed that several team members had received such offers.
Amazon’s CEO Andy Jassy also recently acknowledged that AI is expected to replace some roles within the company, further illustrating the seismic shift AI is driving across the sector.
As Microsoft doubles down on its AI ambitions, the job cuts reflect a broader transformation—prioritizing emerging technologies while redefining its workforce for the future.
