Microsoft to cut 3% jobs globally in largest layoff since 2023

Microsoft announced on Tuesday that it will lay off approximately 6,000 employees, or nearly 3% of its global workforce, in a broad restructuring move aimed at reallocating resources toward artificial intelligence and data infrastructure expansion.

The cuts will affect staff across multiple departments including LinkedIn, Xbox, and core software engineering units, marking the company’s largest round of layoffs since 2023.

Microsoft, which employed 228,000 people as of June last year, said the move is necessary to align operations with its long-term strategic priorities, particularly in AI.

A Microsoft spokesperson confirmed the decision, stating: “We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.”

The tech giant added that the layoffs are not related to performance reviews and will span across all levels and geographies.

The move follows Microsoft’s robust Q1 earnings, buoyed by strong Azure cloud growth.

However, the company’s AI infrastructure investment—set to hit $80 billion in capital spending this fiscal year—has created pressure on profit margins, prompting cost-cutting across other divisions.

LinkedIn, which contributed $15.5 billion in revenue in 2024, is among the most affected units.

Reductions here could slow updates to recruitment tools like LinkedIn Recruiter and LinkedIn Learning, raising concerns about the platform's effectiveness in a tightening job market.

Industry analysts suggest Microsoft may need to maintain annual headcount reductions to offset rising depreciation from AI-driven capital expenditure.

This wave of layoffs follows similar job cuts across the tech sector, including at Google and Amazon, as firms prioritise AI expansion while safeguarding profits.