Microsoft to lay off 9,000 employees in fresh round of job cuts amid AI-driven restructuring

Microsoft is starting its new fiscal year with another round of layoffs—this time letting go of about 9,000 employees, or just under 4% of its global workforce, Microsoft announced on Wednesday.

The news comes just weeks after Bloomberg reported that Microsoft was preparing for another wave of layoffs, barely a month after cutting 6,000 jobs.

Microsoft Layoffs Continue: Cuts 9,000 Jobs in Efficiency Drive

The cuts affect teams across different departments, experience levels, and locations, according to a person familiar with the matter. The move comes as part of a broader shake-up that usually happens around the start of Microsoft’s fiscal year, which began Tuesday.

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

This isn’t the first round of layoffs this year. Microsoft trimmed less than 1% of its headcount in January based on performance. Then came deeper cuts—over 6,000 jobs in May, followed by at least 300 more in June. The company had around 228,000 employees globally as of June.

While this round isn’t the biggest in company history (that title still belongs to the 18,000-person reduction in 2014 after the Nokia acquisition), it reflects a clear internal shift. Microsoft is reportedly working to flatten its organizational structure, cutting layers of management between top leadership and individual contributors—something already seen during the May layoffs.

The company isn’t struggling financially. In fact, it’s far from it. Microsoft brought in nearly $70 billion in revenue during the March quarter and cleared almost $26 billion in net income, beating Wall Street expectations. Executives are forecasting about 14% year-over-year revenue growth for the June quarter, with Azure and productivity tools like Office 365 driving that growth.

While Microsoft continues to lay off staff, the company “reported nearly $26 billion in net income on $70 billion in revenue for the March quarter. The numbers were well ahead of Wall Street’s consensus, keeping Microsoft ranked as one of the most profitable companies in the S&P 500 index, according to data compiled by FactSet,” according to a report by CNBC.

But the focus now is efficiency. AI is becoming central to Microsoft’s future, and the company is moving fast to reorganize around that. These job cuts seem to be part of the tradeoff: streamlining teams so more resources can be redirected into AI initiatives.

Microsoft isn’t alone. Other software companies like Autodesk, Chegg, and CrowdStrike have made similar moves this year. And the broader job market may be showing signs of strain. On the same day Microsoft’s layoffs surfaced, ADP reported that the U.S. private sector lost 33,000 jobs in June—a big miss compared to the 100,000 gain economists had predicted.

Tech may still be profitable, but even the biggest names are tightening up.