Microsoft to Lay Off Approximately 3% of Employees in Biggest Downsizing in Over Two Years

Microsoft began laying off nearly 3% of its entire workforce Tuesday, its largest mass layoff in more than two years.

The tech giant didn’t disclose the total number of lost jobs, but it will amount to about 6,000 people.

Last June, Microsoft reported having 228,000 full-time employees globally, with about 55% based in the United States.

Located in Redmond, Washington, Microsoft has announced upcoming layoffs that will span all levels and locations, with a particular emphasis on reducing managerial positions. Employees started receiving notifications about these changes on Tuesday.

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Earlier in January, Microsoft implemented a smaller round of layoffs based on performance. However, the upcoming 3% reduction will be the largest since early 2023, when the company laid off 10,000 workers, accounting for nearly 5% of its workforce, as it joined other tech firms in cutting back after their expansion during the pandemic.

The latest layoffs come just weeks after Microsoft reported strong sales and profits that beat Wall Street expectations for the January-March quarter, which investors took as a dose of relief during a turbulent time for the tech sector and U.S. economy.

Microsoft’s chief financial officer, Amy Hood, said on an April earnings call that the company was focused on “building high-performing teams and increasing our agility by reducing layers with fewer managers.” She also said the headcount in March was 2% higher than a year earlier, and down slightly compared to the end of last year.

The layoffs are expected to hit across all parts of Microsoft’s business, including the career networking site LinkedIn and the video game platform Xbox.

The company didn’t give a specific reason for the layoffs, only that they were part of “organizational changes necessary to best position the company for success in a dynamic marketplace.”

Microsoft has said it has been spending $80 billion in the fiscal year that ends in June on building data centers and other infrastructure it needs to develop to operate its artificial intelligence technology. Those AI tools have been pitched as changing the way people work, including in Microsoft’s own workplaces.

Microsoft CEO Satya Nadella told Meta CEO Mark Zuckerberg at an AI event last month at Meta’s headquarters that “maybe 20, 30% of the code” for some of Microsoft’s coding projects “are probably all written by software.”