News Highlights:
- Microsoft is laying off about 6,000 employees—3% of its global workforce—as part of a broad restructuring.
- The layoffs follow a strong financial quarter, with Microsoft exceeding revenue expectations and projecting continued growth.
Two years after its last significant round of layoffs, Microsoft Corp. has announced plans to cut approximately 6,000 jobs, amounting to about 3% of its global workforce.
According to CNBC, the layoffs will span “all levels, teams and geographies,” reflecting a company-wide restructuring effort.
CBS News further reported that the initiative is aimed at trimming management layers to improve efficiency.
Roughly one-third of the impacted employees are based at Microsoft’s Redmond, Washington headquarters. Regulatory filings submitted by the company in the state indicate that local job cuts will become effective on June 12.
A spokesperson for Microsoft addressed the move, stating, “We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace. To enhance our efficiency, we will minimize redundancy by streamlining our processes, procedures and roles.”
This development is not entirely unexpected. In April, following Microsoft’s third-quarter earnings report, Chief Financial Officer Amy Hood emphasized the company’s focus on “reducing layers with fewer managers.”
Microsoft is not alone in this approach; over the past two years, several major tech firms, including Meta Platforms Inc., have launched similar cost-reduction efforts.
Although Microsoft has not disclosed the anticipated savings from this round of layoffs, historical context offers some insight. When the company cut 10,000 jobs in 2023, analysts estimated it would save approximately $2.5 billion over the subsequent year. That projection included a $1.2 billion charge associated with the layoffs.
Ironically, the announcement comes on the heels of a strong financial performance. Microsoft recently reported a 13% year-over-year increase in revenue, reaching $70.07 billion—nearly $2 billion more than analysts had predicted.
Additionally, its revenue forecast for the current quarter also exceeded expectations, with projected sales ranging from $73.15 billion to $74.25 billion. At the midrange, this projection surpasses estimates by analysts polled by the London Stock Exchange Group (LSEG). The strong financials suggest the layoffs are not driven by immediate business concerns.
In January, Microsoft had already taken steps to rein in spending, directing its U.S. consulting unit to freeze hiring and reduce its “marketing and non-billable external resource spend” by 35%. Whether this unit is a target of the current layoffs remains unclear.
That same month, Microsoft also implemented “performance-based” layoffs affecting less than 1% of its staff, according to CNBC. As of June last year, Microsoft employed approximately 228,000 people.
