Microsoft has revealed plans to reduce its global workforce by approximately 9,000 employees, amounting to under 4% of its total staff. This reduction will impact various teams, locations, and experience levels, according to a source familiar with the company’s internal decisions.
The announcement coincides with the start of Microsoft’s 2026 fiscal year, a time when the Redmond, Washington-based technology giant typically implements strategic organisational changes.
“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a spokesperson for Microsoft commented.
This latest round of job cuts follows earlier reductions this year. In January, Microsoft trimmed less than 1% of its workforce based on performance evaluations. In May, the company eliminated over 6,000 positions, and in June, it cut at least another 300 roles.
As of June 2024, Microsoft employed roughly 228,000 people worldwide. The company also laid off 10,000 employees in 2023. Historically, the largest workforce reduction occurred in 2014, when Microsoft cut 18,000 jobs following its acquisition of Nokia’s devices and services business.
One of the key goals behind the current layoffs is to streamline management by reducing the number of managerial layers between frontline employees and senior executives. This restructuring aims to boost agility and improve decision-making speed within the company.
Phil Spencer, Microsoft’s CEO of gaming, addressed employees in his division in a memo, stating, “To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.”
Despite these workforce reductions, Microsoft continues to demonstrate strong financial performance. For the quarter ending March 2024, the company reported nearly $26 billion in net income on revenues of $70 billion, surpassing Wall Street expectations. This robust performance keeps Microsoft among the most profitable companies in the S&P 500 index.
Looking ahead, the company forecasts approximately 14% year-over-year revenue growth in the June quarter, driven by expansion in its Azure cloud services and corporate productivity software subscriptions.
Microsoft’s stock reached a record high of $497.45 per share on June 26 but closed slightly lower by 0.2% on the day of the layoff announcement, while the S&P 500 index rose by 0.5%.
Other software firms such as Autodesk, Chegg, and CrowdStrike have also implemented job cuts in 2025. Additionally, payroll processing company ADP reported that the U.S. private sector lost 33,000 jobs in June, contrary to economists’ expectations of a 100,000-job increase.