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US-based technology giant Microsoft announced on Wednesday a reduction of approximately 9,000 jobs worldwide, equivalent to nearly 4% of its global workforce.
This latest round of layoffs spans various teams, regions, and levels of experience, reflecting the company’s ongoing efforts to streamline operations while accelerating its artificial intelligence (AI) integration.
A person familiar with the matter told business-focused CNBC that a Microsoft spokesperson stated in an email, “We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace.”
The job cuts mark Microsoft’s fourth reduction this year. Earlier in January, the firm trimmed about 1% of its staff, followed by a more significant layoff of over 6,000 positions in May, and 300 in June. The company employed roughly 228,000 people as of June 2024, meaning the recent cuts reduce the workforce by approximately 9,000 employees.
This restructuring aligns with Microsoft’s commitment to embed AI technologies across its products, a strategy intensified since the launch of ChatGPT in 2022, which significantly impacted the tech industry. Microsoft’s CEO of gaming, Phil Spencer, noted in an internal memo that certain business areas will be reduced or ended to prioritize strategic growth sectors and increase efficiency by flattening management layers.
Despite the workforce reduction, Microsoft’s financial performance remains strong. In the most recent quarter, the company reported nearly $26 billion in net income on revenues of $70 billion, surpassing market expectations. Microsoft currently holds the position of the world’s second most valuable company, with a market capitalization of $3.66 trillion, recently overtaken by Nvidia.
Microsoft has a history of workforce restructuring to adapt to business demands. Following its 2014 acquisition of Nokia’s devices and services division, the company undertook what was considered one of the largest layoffs in corporate history, cutting approximately 18,000 jobs.
Shares of Microsoft, listed on the Wall Street stock exchange, saw a slight decline of 0.075% to $491.68 as of 16:05 GMT on Wednesday, reflecting a relatively flat market response to the announcement.
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