Microsoft LayOffs 6,000 Employees, About 3% of Its Workforce
Microsoft announced on Tuesday that it will be laying off around 6,000 employees, which accounts for 3% of its global workforce. These cuts will affect various teams, levels, and regions.
A Microsoft spokesperson shared with CNBC that the company is continuing to make organizational adjustments to better position itself for success in a competitive and ever-changing market.
Strong Financial Performance Amid Layoffs
Despite the job cuts, Microsoft has reported stronger-than-expected financial results. The company posted a quarterly net income of $25.8 billion, with an optimistic forecast released in late April.
As of June, Microsoft employed 228,000 people worldwide. However, the company is reducing its workforce at its Redmond, Washington headquarters by nearly 2,000 roles, including 1,510 in office-based positions.
Largest Layoff Since 2023
This round of Microsoft layoffs appears to be Microsoft’s largest since it cut 10,000 jobs in 2023. Earlier this year, the company also conducted a smaller, performance-based round of layoffs. The latest cuts, however, are not linked to employee performance, according to the spokesperson.
Streamlining Management Structure
One of the key goals of the layoffs is to simplify the company’s management structure, a move similar to Amazon’s recent decision to reduce unnecessary layers of management. This aligns with efforts to make the organization more agile and efficient.
Other Companies Make Similar Moves
In a related trend, cybersecurity firm CrowdStrike recently announced that it would be letting go of 5% of its workforce, reflecting broader industry changes.
Strategic Shifts and Growth in AI
Earlier this year, Microsoft CEO Satya Nadella acknowledged that the company would adjust its sales strategies after facing slower-than-expected growth in Azure cloud revenue unrelated to artificial intelligence. However, AI-driven cloud growth exceeded expectations, prompting the company to rethink its approach.
As part of this shift, Nadella emphasized the importance of adapting to new trends and rethinking strategies to stay ahead in the evolving tech landscape.
Microsoft Stock Hits New Highs
Microsoft’s stock performed well, closing at $449.26 on Monday—its highest point this year. The stock reached a record high of $467.56 last July, reflecting investor confidence despite the recent layoffs.
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