Microsoft plans to lay off about 9,000 employees, representing less than 4% of its global workforce across various teams, roles, and geographies. This announcement aligns with the start of Microsoft's 2026 fiscal year, a typical time for organizational changes. Earlier in 2025, Microsoft cut over 6,000 jobs in May and at least 300 in June, following a less than 1% reduction in January based on performance. As of June 2024, Microsoft employed 228,000 people, after laying off 10,000 in 2023. The layoffs aim to reduce management layers to increase agility and effectiveness, particularly in the Gaming division, where some work areas will be ended or decreased.
Financial Performance and Outlook
Despite the layoffs, Microsoft reported strong financial results for the March quarter, with nearly $26 billion in net income on $70 billion in revenue, exceeding Wall Street expectations. The company anticipates about 14% year-over-year revenue growth in the June quarter, driven by expansion in Azure cloud services and corporate productivity software subscriptions. Microsoft's stock recently hit a record high of $497.45 per share but closed slightly down following the layoff news.
Industry Context
Other software companies such as Autodesk, Chegg, and CrowdStrike have also reduced staff in 2025. Meanwhile, the U.S. private sector lost 33,000 jobs in June, contrary to economists' expectations of a 100,000 job increase.
