Microsoft is planning to cut thousands of jobs as it ramps up investments in artificial intelligence.

The workforce reductions, primarily affecting sales positions, are part of a larger initiative to optimize the company’s staffing, according to Bloomberg’s report on Wednesday.

These job cuts are anticipated to be unveiled in the early part of next month, coinciding with the conclusion of the tech company’s fiscal year, the report mentioned, citing sources familiar with the situation.

Sales teams will not be exclusively affected by the reductions, and the timing could still change, the people told the outlet.

The terminations follow a previous round of Microsoft layoffs in May that hit more than 6,000 people, mostly in product and engineering positions. 

In April, the largest company in the world said it planned to use third-party firms to handle more sales of software to small and mid-size customers.

The company had a global headcount of 228,000 at the end of June 2024. 

With a market valuation exceeding $3 trillion, Microsoft aims to control expenses as it invests considerable resources into its significant venture on artificial intelligence.

Microsoft is planning to cut thousands of jobs as it ramps up investments in artificial intelligence (Pictured: CEO Satya Nadella)

Microsoft declined to comment to Bloomberg about the potential job cuts.  

The news comes a day after Amazon’s CEO announced brutal workforce cuts as the company also increases its use of AI.

Amazon boss Andy Jassy said he plans to reduce the company’s corporate workforce over the next few years as the tech will make certain roles redundant.  

Jassy told employees in a note seen by the Wall Street Journal that AI was a once-in-a-lifetime technological advancement and it has already transformed how Amazon operates.

‘​​As we roll out more Generative AI and agents, it should change the way our work is done,’ he wrote in the memo.

It is not yet clear how many workers will lose their jobs and when the cuts will come. 

‘It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce,’ Jassy explained. 

Those close to the matter told the outlet that a large chunk of the decrease in headcount would hopefully occur via attrition. This means as employees move on their roles will not be filled. 

Microsoft’s cuts, which will hit sales roles in particular, are part of a broader effort to streamline the company’s workforce 

Amazon boss Andy Jassy warned that AI will lead to job cuts 

However, this will not cover all of the reductions and layoffs are still expected to occur at some point. 

Amazon is the second largest employer in the country and is seen as a bellwether for employment stability. 

The company has already slowed hiring, suggesting AI is already influencing the company’s staffing needs.

It is also clear the company is betting big on the new technology, after it revealed plans to splash $100 billion on data centers that AI depends on. 

It comes as Americans grow increasingly concerned about the impact of AI on the jobs market.  

The tech is continuing to upend the jobs market with white collar entry-level jobs disappearing fastest and layoffs in tech, finance and consulting gathering pace. 

Earlier this month Procter & Gamble, which makes diapers, laundry detergent, and other household items, announced it would cut 7,000 jobs, or about 15 percent of non-manufacturing roles.