Microsoft is cutting 3% of its workforce

Microsoft is making another round of layoffs—this time cutting around 3% of its global workforce, or roughly 6,800 jobs. The move comes as the company looks to “reduce layers of management” and streamline its structure across teams and geographies. It’s one of Microsoft’s biggest cuts since January 2023, when it slashed 10,000 roles in response to slowing growth.

Unlike earlier rounds tied to underperformance, Microsoft clarified these cuts are strategic, not personal. A spokesperson said the move is meant to position the company “for success in a dynamic marketplace,” not because employees failed to meet expectations. And with 228,000 employees on the books as of June 2024, the cuts are sizable but far from a collapse.

CEO Satya Nadella has been upfront about Microsoft's transition amid a major platform shift to AI. In January, he flagged upcoming changes in sales execution that would impact Azure cloud growth. While AI-related revenue has been outperforming internal targets, the legacy structure hasn’t kept pace. The company now wants to lean harder into AI wins—and stop clinging to past-era sales and management strategies.

Microsoft isn’t alone. CrowdStrike just laid off 5% of its staff, and while Big Tech is booming in revenue again, the hiring free-for-all of the pandemic era is long gone. Companies are optimizing their headcount to match AI-driven goals and trying to keep margins healthy amid an uncertain global economy and Trump-era tariff risks.

Despite the layoffs, Microsoft stock remains near all-time highs, trading around $449 this week. That’s not a company in trouble—it’s a company proactively trimming the fat before it turns to bloat. As the AI arms race continues, Microsoft is betting that a leaner, faster-moving team is what it needs to stay at the top of the leaderboard.