Microsoft is slashing 7,000 jobs—about 3% of its global workforce—even as it celebrates $25.8 billion in quarterly profits. This marks the company’s biggest round of layoffs since 2023 and signals a broader trend among tech giants reshaping their teams despite booming earnings.
The layoffs span across departments, seniority levels, and regions, and come just weeks after Microsoft delivered an impressive earnings report with a bullish outlook. The company confirmed the cuts are part of a structural overhaul designed to better navigate today’s rapidly evolving market. A spokesperson said the decision aims to “position the company for success in a dynamic marketplace.”
What’s surprising is the timing. Microsoft ended June with 228,000 employees worldwide and recently hit record highs in net income. But like other tech titans, it’s now shifting priorities—especially around AI, cloud services, and internal efficiency.
In fact, this move reflects a pattern seen across the industry. Amazon recently announced 14,000 managerial job cuts to save $3.5 billion, while CrowdStrike trimmed 5% of its workforce. Microsoft’s decision aligns with these efforts to eliminate bureaucracy and streamline execution.
Back in January, CEO Satya Nadella addressed the need for change. After Azure’s slower growth outside AI segments, Nadella stressed the importance of rethinking incentives and go-to-market strategies during platform transitions. Microsoft has increasingly leaned into AI-driven cloud performance, which has outpaced forecasts.
Although some layoffs earlier this year were linked to performance, this current wave is not. Instead, it’s part of a broader effort to flatten management layers—a strategy also adopted by Amazon, which pointed to “unnecessary layers” as a reason behind its own staff reductions.
Despite the workforce cuts, Microsoft’s stock remains strong. Shares closed Monday at $449.26, not far from the all-time high of $467.56 set last July. This suggests investors still have confidence in Microsoft’s long-term growth, especially as it doubles down on AI innovation.
While layoffs are painful for those affected, Microsoft’s leadership seems focused on staying nimble. In today’s tech landscape, even the most profitable companies are rethinking how they scale, hire, and innovate.
