Microsoft Announces Second Major Layoff in 2025, Affects 9,000 Employees
Microsoft is undergoing another major round of layoffs, impacting around 9,000 employees — roughly 4% of its global workforce. This move marks the company’s second-largest round of job cuts in 2025 and reflects its ongoing efforts to streamline operations and reshape teams amid changing business priorities.
Impact on Various Departments
The layoffs span across departments, locations, and seniority levels, with a significant number affecting its Xbox gaming division. Studios like King, ZeniMax, and Turn 10 are among those hit, and projects like Perfect Dark and Everwild have been scrapped. According to a Bloomberg report, King, the Microsoft-owned company behind Candy Crush, is cutting about 10% of its staff, or around 200 jobs. Other parts of Microsoft, like ZeniMax, are also laying off workers. The company is also cutting over 70 jobs at its Forza Motorsport studio, Turn 10.
Previous Layoffs and Company Restructuring
Notably, this is the second biggest job cut by Microsoft in the year 2025 and its second largest overall. The company slashed 6,000 jobs in May this year, targeting product and engineering roles, followed by at least 300 more job cuts in June. Microsoft cited the need to “remove layers of management to increase agility and effectiveness” while redirecting resources toward artificial intelligence development.
Statements from Microsoft Officials
A Microsoft spokesperson said the job cuts will affect employees from different teams, locations, and experience levels, as Microsoft aims to simplify its structure and reduce management layers. “We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” the spokesperson added.
Xbox leader Phil Spencer sent an internal memo to its employees, stating, “To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.” He also emphasized that prioritizing opportunities is essential but acknowledged the significance of the moment for those impacted.
Support for Affected Employees
HR is working directly with impacted employees to provide severance plan benefits (aligned with local laws), including pay, healthcare coverage, and job placement resources to support their transition.
Impact on Microsoft Stock
According to a CNBC report, Microsoft stock hit a record high of $497.45 on June 26. On Wednesday – July 2, it dipped slightly by 0.2%, while the S&P 500 rose 0.5%.
