Microsoft has announced plans to lay off up to 9,000 employees in its latest round of job cuts for 2025, as the tech giant continues to realign its workforce to support its aggressive push into artificial intelligence (AI).
The layoffs, which amount to about 4% of Microsoft’s 228,000 global employees, will impact multiple divisions, though reports indicate that the company’s Xbox gaming unit is among those affected. The company has not officially confirmed which departments will be hardest hit.
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson told the BBC.
This marks the fourth round of layoffs for Microsoft this year. In May, the company cut 6,000 positions. Data from Washington state reveals that over 800 of the current job cuts will affect employees in Redmond and Bellevue which are key Microsoft hubs.
The restructuring comes as Microsoft doubles down on its AI ambitions, committing $80 billion to build expansive data centres and infrastructure to train and deploy AI models. The company has heavily invested in AI development, including hiring renowned British AI researcher Mustafa Suleyman to head its Microsoft AI division.
Microsoft is also a major investor in OpenAI, the company behind ChatGPT. However, reports suggest tensions have grown between the two firms, particularly as Microsoft has struggled to position its own AI assistant, Copilot, in a market where workers reportedly still prefer ChatGPT.
Despite layoffs among core staff, top AI talent remains in high demand across the industry. Tech rivals like Meta have reportedly offered signing bonuses of over $100 million to lure AI engineers. Meta CEO Mark Zuckerberg has taken a hands-on approach to build the company’s ‘superintelligence’ lab, while OpenAI CEO Sam Altman recently revealed a wave of high-value offers targeting his team.
Meanwhile, Amazon’s CEO Andy Jassy has suggested that AI could replace some job functions within the company in the near future.
The wave of layoffs at Microsoft reflects a broader trend in Big Tech, consolidating core operations while shifting resources to dominate the emerging AI frontier.
