Microsoft (MSFT.O) announced Wednesday that it will lay off nearly 4% of its global workforce, the latest in a series of job reductions as the tech giant seeks to control costs amid its massive investments in artificial intelligence infrastructure.
As of June 2024, Microsoft employed around 228,000 people worldwide. In May, the company disclosed plans to cut approximately 6,000 jobs. Bloomberg previously reported that Microsoft was preparing to eliminate thousands of positions, with a focus on its sales organization.
The maker of Windows has committed to $80 billion in capital expenditures for fiscal year 2025. But the surging expenses tied to expanding its AI capabilities have placed pressure on profit margins, with the company expecting a year-over-year decline in its cloud business margins for the June quarter.
On Wednesday, Microsoft said it would flatten its corporate structure by reducing management layers and streamlining roles, processes, and product offerings.
The Seattle Times first reported the layoffs earlier in the day. Separately, Bloomberg reported that Microsoft’s King division in Barcelona—known for developing Candy Crush—is also cutting about 10% of its workforce, or roughly 200 employees.
Microsoft confirmed to Reuters that parts of its gaming division were affected by the layoffs but clarified that the cuts did not represent a majority of that group. No additional details were provided.
Other major tech companies making substantial AI investments have also turned to job cuts.
Meta Platforms (META.O), parent company of Facebook, said earlier this year it would trim roughly 5% of its lowest-performing employees. Alphabet’s Google (GOOGL.O) has laid off hundreds of workers over the past year. Amazon (AMZN.O) has also reduced headcount in several divisions, most recently in its books unit, following earlier rounds in devices, services, and communications.
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