Microsoft has started laying off approximately 3% of its workforce, affecting around 6,000 employees across all levels and geographies. The tech giant, which employed 228,000 full-time workers as of last June, is focusing on reducing the number of managers as part of its “organizational changes necessary to best position the company for success in a dynamic marketplace.” This move comes just weeks after Microsoft reported strong sales and profits that beat Wall Street expectations for the January-March quarter.
The layoffs are expected to impact various parts of Microsoft’s business, including LinkedIn and Xbox. This is Microsoft’s largest mass layoff since early 2023 when the company cut 10,000 workers, almost 5% of its workforce. Microsoft’s chief financial officer, Amy Hood, had previously stated that the company was focused on “building high-performing teams and increasing our agility by reducing layers with fewer managers.”
Interestingly, these layoffs occur as Microsoft continues to invest heavily in artificial intelligence technology. The company is spending $80 billion in the fiscal year ending in June on building data centers and other infrastructure needed to develop and operate its AI tools. Microsoft CEO Satya Nadella recently mentioned that “maybe 20, 30% of the code” for some of Microsoft’s coding projects “are probably all written by software,” highlighting the growing role of AI in the company’s operations.
This development comes against a backdrop of workers increasingly using AI tools in their jobs, often without their employers’ knowledge. A survey by digital insight company Sin found that 62% of workers with less than 15 years of experience have used AI, compared to 31% of those with more than 15 years of experience. The survey also revealed that more than half of the companies where respondents work lack an official AI policy, making its use somewhat of a question mark.
