Microsoft announced on Wednesday it will lay off nearly 4% of its workforce, affecting about 9,000 employees, as the tech giant looks to rein in costs amid hefty investments in artificial intelligence infrastructure. The move affects less than 4% of Microsoft’s global workforce across different teams, geographies and levels of experience.
Microsoft had pledged $80 billion in capital spending for its fiscal year 2025. However, the soaring cost of scaling its AI infrastructure has weighed on its margins, with its June quarter cloud margin expected to shrink from last year. As with previous layoffs, Microsoft is looking to reduce the number of layers of managers that stand between individual contributors and top executives.
Microsoft confirmed that its gaming division was impacted by the layoffs, although not the majority of the unit. The company had about 228,000 employees worldwide as of June 2024. This represents Microsoft’s second major round of layoffs in 2025, following cuts affecting about 6,000 workers in May.