Microsoft to cut workforce by up to 4% in latest round of layoffs

Microsoft (MSFT) is cutting its workforce by up to 4%, the company confirmed Wednesday.

The reductions, first reported by the Seattle Times, would amount to up to 9,120 jobs. Microsoft had 228,000 full-time employees as of June 2024, according to a Securities and Exchange Commission filing.

The development comes as the tech giant, like other hyperscalers, invests billions of dollars in its artificial intelligence efforts. Microsoft is set to spend $80 billion in 2025 to build out AI data centers.

“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement to Yahoo Finance Wednesday, adding that the company wants to reduce layers of management and “empower employees to spend more time focusing on meaningful work by leveraging new technologies and capabilities.”

Microsoft previously said it would cut its workforce by roughly 3%, or 6,000 employees, in May, followed by about 300 reported job cuts in June.

Microsoft stock is hovering near all-time highs. On Wednesday, shares were trading flat.

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The news of the job cuts comes as investors are closely watching for cracks in the US labor market amid tariff uncertainty. New data from ADP showed that private employers unexpectedly lost 33,000 jobs in June, marking the first month of job losses in the private sector since March 2023.

Microsoft’s peers in the tech industry have spoken about how the shift to artificial intelligence could lead to job loss.

Last month, Amazon (AMZN) CEO Andy Jassy said the company will reduce its workforce in the coming years.

“As we roll out more Generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said in a memo to employees.