Microsoft announces another mass layoff, thousands of workers affected

Microsoft Cuts 9,000 More Jobs as Tech Giant Streamlines Operations Amid AI Push

Second major layoff wave this year affects sales, marketing and gaming divisions across multiple continents

By Claude Anthropic
July 2, 2025

Microsoft Corp. announced Tuesday that it would eliminate approximately 9,000 positions globally, marking the software giant's second major workforce reduction this year as the company seeks to control costs while ramping up investments in artificial intelligence infrastructure.

The cuts, affecting less than 4% of Microsoft's roughly 228,000-person workforce, span multiple divisions and geographic regions, with the heaviest impact falling on sales and marketing teams, according to company officials and internal communications reviewed by The Wall Street Journal.

The reductions represent Microsoft's second major wave of layoffs this year as it seeks to control costs while ramping up on artificial intelligence spending. The company previously eliminated approximately 6,000 positions in May, bringing the total workforce reduction in 2025 to more than 15,000 employees.

Gaming Division Bears Heavy Burden

Microsoft's Xbox gaming unit has been particularly hard hit, with substantial cuts affecting subsidiaries King and ZeniMax Media. Bloomberg's Jason Schreier reports that around 10% of King's studio workforce, or approximately 200 jobs, are being eliminated, while ZeniMax Media's marketing teams in London and Rockville, Maryland, are also facing reductions.

The gaming cuts mark the fourth significant layoff round targeting Xbox operations in just 18 months, following Microsoft's $69 billion acquisition of Activision Blizzard in 2023. Phil Spencer, Microsoft Gaming's chief executive, told employees in an internal email that the company was "removing layers of management to increase agility and effectiveness."

As part of the restructuring, Microsoft is also canceling Rare's "Everwild" project, which was first announced in 2019.

Regional Impact Concentrated in Core Markets

The layoffs are hitting Microsoft's home base particularly hard. The company employed around 54,000 people in the Seattle region before the latest reductions, with nearly 2,300 workers already laid off in Washington state in multiple rounds earlier this year—the largest layoffs in the company's home state since 2023.

International operations are also affected, with confirmed job losses at European subsidiaries. Sources confirm cuts to ZeniMax Media's marketing team in London, U.K. as well as Rockville, Maryland.

Departments Most Affected

The current round of layoffs is targeting several key functional areas across Microsoft's operations:

Sales and Marketing: The July 2025 layoffs are expected to primarily impact the global sales and marketing organization, with particular focus on the Microsoft Customer and Partner Solutions division.

Engineering and Product: Previous June layoffs affected roles across engineering, product management, marketing and legal departments.

Gaming Operations: Beyond the cuts at King and ZeniMax, the broader Xbox division is experiencing reductions across all departments.

Part of Broader Tech Industry Trend

Microsoft's workforce reductions reflect a broader transformation across the technology sector. Technology companies have announced 76,214 job cuts this year, up 27% from the same period last year, according to outplacement firm Challenger, Gray & Christmas.

The firm cited disruptions from AI advancement and visa uncertainties as key factors driving tech layoffs across the industry.

Financial Performance Remains Strong

Despite the cuts, Microsoft continues to post robust financial results. In its most recent quarterly report, the company grew its net income by 18% year over year, amounting to a total of $25.8 billion. Last quarter, Microsoft reported $64.7 billion in revenue, representing a 15% increase, atop $245.1 billion for the entire fiscal year, which also represented 16% growth year-over-year.

Strategic Rationale

Microsoft is "building high-performing teams and increasing our agility by reducing layers with fewer managers," said Amy Hood, Microsoft's CFO, on an April 30 earnings call. The company is simultaneously spending record sums—as much as $80 billion in the recently completed fiscal year—to expand its data centers and cloud infrastructure to meet AI demand.

A Microsoft spokesperson said the company is continuing to implement "organizational changes necessary to best position the company and teams for success in a dynamic marketplace."

Looking Forward

The timing of the layoffs, coinciding with the start of Microsoft's new fiscal year on July 1, follows the company's traditional pattern of restructuring operations during this period. However, industry analysts note that the scale and frequency of reductions in 2025 represent an unusually aggressive approach to workforce optimization.

The cuts come as Microsoft faces intensifying competition in the AI space, with the company seeking to balance massive infrastructure investments against operational efficiency as it positions itself for long-term growth in artificial intelligence and cloud computing.

Microsoft Layoffs Timeline 2025

January    May         June        July
   |        |           |           |
   ▼        ▼           ▼           ▼
Small    6,000 jobs   Additional   9,000 jobs
cuts     eliminated   305 cuts     announced
         (3% of       (Washington   (4% of
         workforce)    state only)   workforce)

Total 2025 Layoffs: 15,300+ employees

By the Numbers

MetricFigure
Current round of layoffs9,000 employees
Percentage of workforce affectedLess than 4%
Total Microsoft workforce (June 2024)~228,000 employees
Total 2025 layoffs to date15,300+ employees
Previous May 2025 cuts6,000 employees
King studio cuts~200 jobs (10% of studio)
Washington state employees (pre-cuts)~54,000

Microsoft shares closed trading Tuesday at $497.49, up approximately 1% following news of the layoffs.

Sources

Bloomberg News

GeekWire

Windows Central

TechCrunch

Industry Analysis

Financial News

Specialized Coverage

General Business News


Microsoft announces another mass layoff, thousands of workers affected

Comments

Post a Comment

Popular posts from this blog

Nicholas A Lambert and WW1 - Everything old is new again.

Image
Everything old is new again. The economics, politics, and conflicts of the early 20th century are looking familiar in todays headlines. Maybe we can learn something from a top notch economist and historian study of the first World War. Nicholas Lambert received his undergraduate and graduate degrees from Oxford University. The World War One Historical Association has twice awarded him the Norman B. Tomlinson book prize: Sir John Fisher's Naval Revolution (1999) and Planning Armageddon: British Economic Warfare and the First World War (2013).  Lambert discusses Britain's carefully planned grand strategy of economic warfare intended to bring about the rapid collapse of Germany’s financial systems through engineering a controlled implosion of the global trading system. As such, "economic warfare" constituted a national strategy of quick, decisive war comparable in function and objectives to Germany’s infamous S...
Read more

Top Military and Marine Unmanned Underwater Vehicle Companies

Image
The Boeing Echo Voyager unmanned underwater vehicle is the model for the U.S. Navy extra-large unmanned underwater vehicle (XLUUV), which is developing four prototypes. Summary Here's a concise summary of military and marine autonomous underwater vehicle companies. Key Market Information: - The unmanned underwater vehicles market is valued at $4.8 billion in 2024 - Projected to reach $11.1 billion by 2030, growing at 15% CAGR - Growth driven by increasing investment in commercial and defense applications Leading Companies: Traditional Defense/Military Leaders: 1. Kongsberg (Norway) - Maritime tech and defense systems leader since 1814 2. Saab AB (Sweden) - Known for Sabertooth UUV with deep water capabilities 3. Boeing (USA) - Produces Echo Voyager, the model for US Navy's XLUUV program 4. Lockheed Martin (USA) - Provides underwater drones and sonar systems 5. Oceaneering International (USA) - Major ROV manufacturer, offers Freedom AUV 6. Fugro (Netherlan...
Read more

Port Alpha: The US Navy's Astonishing Next-Gen Shipyard

Image
Port Alpha: The US Navy's Astonishing Next-Gen Shipyard - YouTube US Navy Backs Saronic's Port Alpha: Revolutionary Shipyard to Transform Unmanned Fleet Capabilities By Military Affairs Correspondent May 19, 2025 In a significant advancement for the US Navy's strategic vision of a hybrid fleet, defense technology company Saronic has secured $600 million in funding to establish Port Alpha, a revolutionary shipyard designed exclusively for constructing unmanned surface vessels (USVs). This development comes as the Navy accelerates its plans to integrate unmanned capabilities within its battle force, aiming for approximately 150 large unmanned platforms by 2045. "We will bring these elements together with a single goal: to rapidly build a fleet of autonomous vessels in America that redefine maritime superiority and guarantees freedom of the seas for generations to come," said Dino Mavrookas, Saronic's CEO and co-founder, announcing the ambitious project in Fe...
Read more