Microsoft revealed on Wednesday it will lay off roughly 9,000 employees worldwide. This represents under 4% of its global workforce and impacts various teams, regions, and experience levels, a source familiar with the matter told CNBC.
The announcement coincides with the start of Microsoft’s 2026 fiscal year, a typical period when the company unveils reorganizations and strategic shifts.
“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said.
Layoff History and Organizational Restructuring
Earlier in 2025, Microsoft had already conducted several layoffs — less than 1% in January based on performance, over 6,000 in May, and around 300 more in June. As of June, Microsoft employed approximately 228,000 people. In 2023, the company laid off 10,000 employees.
Historically, the largest reduction was in 2014, when Microsoft cut 18,000 jobs after acquiring Nokia’s devices and services unit.
The latest cuts also aim to flatten management layers, reducing the distance between individual contributors and top executives to increase agility.
Phil Spencer, Microsoft’s CEO of Gaming, noted in an internal memo that certain areas of the gaming business would be reduced or ended to focus on strategic growth.
Microsoft recently reported a strong financial quarter, with nearly $26 billion in net income on $70 billion in revenue for Q3 of its fiscal year. These results surpassed Wall Street expectations, maintaining Microsoft’s position as one of the most profitable companies in the S&P 500.
Looking ahead, the company expects around 14% year-over-year revenue growth in Q4, driven by Azure cloud services and corporate productivity subscriptions.
Microsoft’s stock hit a record high of $497.45 per share on June 26 but closed down slightly on Wednesday amid broader market movements.
Other software firms such as Autodesk, Chegg, and CrowdStrike have also trimmed staff in 2025. Additionally, the U.S. private sector lost 33,000 jobs in June, according to payroll company ADP, contrasting economists’ expectations for growth.
Author’s Opinion
Microsoft’s continued layoffs highlight the tech sector’s adaptation to evolving market demands and economic uncertainties. While difficult for those affected, trimming management layers and reallocating resources may position the company better for future growth and innovation. Balancing workforce reductions with investment in strategic areas like cloud computing and gaming will be key to sustaining long-term competitiveness.
