Microsoft Initiates Second Round of Mass Layoffs in 2025

Microsoft has announced its second significant wave of layoffs in recent months, affecting approximately 9,000 employees globally. This reduction amounts to about 4% of the company’s total workforce and comes as part of its broader restructuring strategy.

Follow-Up to May Layoffs

This latest move follows a previous round of layoffs in May 2025, when 6,000 employees were let go. Combined, Microsoft has laid off around 15,000 workers over a short span, marking the company's largest job cuts in more than two years.

Departments Most Affected

The layoffs are affecting various departments, with the sales teams, Xbox gaming division, and middle management facing the brunt. Notably, around 830 jobs are being cut at the company's Redmond, Washington headquarters. Sources indicate that some game development projects have also been halted or canceled.

Shift Towards AI and Technical Efficiency

Microsoft cited its focus on streamlining operations, reducing bureaucracy, and investing in artificial intelligence infrastructure as key drivers behind the cuts. The company is currently investing over $80 billion in capital expenditures for fiscal year 2025, largely directed at AI and cloud-based technologies.

Workforce Transformation

A major theme in this restructuring is a shift toward a higher coder-to-non-coder ratio. Microsoft plans to replace many traditional sales roles with technically skilled professionals capable of engaging more deeply with enterprise customers in an AI-first business environment.

Impact and Industry Significance

These sweeping changes reflect Microsoft’s commitment to evolving its workforce for the AI era, but they also signal rising uncertainty in the tech sector. With the Xbox division hit particularly hard, fans and industry watchers are concerned about the future of Microsoft’s gaming ambitions.