[NEW YORK] Microsoft said it will cut 6,000 workers across the company in an effort to reduce management layers.
The planned terminations will amount to less than 3 per cent of the total headcount and occur across geographies, employee levels and include LinkedIn, a spokesperson said.
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” the spokesperson said.
Microsoft, which employed 228,000 people in June 2024, deploys periodic layoffs, often to reorient its headcount towards priority areas. The company laid off 10,000 people in January 2023, including personnel at the HoloLens augmented reality headset unit and other hardware projects.
About 2,000 workers will be impacted at Microsoft’s headquarters in Redmond, Washington, according to a state filing on Tuesday (May 13). The terminations are expected to commence on Jul 13.
The company has been under pressure in recent years to keep a lid on costs amid massive spending on the data centres that power artificial intelligence (AI) services and the Azure cloud-computing unit. Microsoft has said it’s on track to spend about US$80 billion this fiscal year on the server farms.
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CNBC reported the layoffs earlier.
Last year, chief executive officer Satya Nadella said AI was helping the company save on labour costs. The theme came up again on Tuesday during a JP Morgan conference, when Microsoft finance executive Bill Duff said the company is “saving hundreds of millions of US dollars a year” by using AI for customer support and reducing the need for human interaction.
Duff said Microsoft is deploying AI across multiple divisions to help personnel analyse deals for compliance issues, write marketing materials and other tasks. The company routinely reorients its workforce away from legacy products and towards growth initiatives, Duff said.
Late last month, Microsoft told workers it’s planning to use third-party firms to handle more sales of software to small and midsize customers. It also restructured some technical teams earlier last month.
Several other tech companies have also announced layoffs this year. Meta Platforms said in January that it planned to ax about 5 per cent of staff via performance-based terminations and would hire new people to fill those roles. The following month, Bloomberg reported that Salesforce was cutting more than 1,000 positions, in large part to make room for new AI-focused positions. BLOOMBERG
