Microsoft Layoffs Could Affect Up to 9,000 Employees Amid AI-Focused Shift

Tech giant Microsoft is reportedly preparing for a significant round of job cuts that could impact as many as 9,000 employees. These Microsoft layoffs are expected to affect multiple departments, including engineering, marketing, and the company’s gaming division. According to The Economic Times, the company said on Wenesday that it will lay off 4% of its workforce.

The company had approximately 228,000 people globally as of June 2024, had already announced in May that about 6,000 roles would be reduced. According to a Bloomberg News report last month, the planned reductions were expected to primarily impact sales teams, with thousands of jobs on the line.

AI Investments Drive Organizational Restructuring

Sources say the Microsoft’s workforce reduction is part of a broader strategy to reallocate resources toward AI and emerging technologies. The company has been heavily investing in OpenAI and building AI capabilities into its products, including Copilot and Azure services.

These Microsoft layoffs due to AI spending signal a shift in focus. The tech major appears to be optimizing its operations for long-term growth in AI rather than traditional segments. This includes reassessing its employee structure to support faster innovation and product delivery.

Industry experts believe that many of the affected roles are non-technical or mid-level managerial positions. These roles are reportedly being phased out to streamline workflows and reduce operational complexity.

Xbox Studios Also Face Job Cuts

The gaming division has not been spared either. Reports suggest that a portion of the Xbox studio’s layoffs will include employees from game development and publishing teams. Microsoft’s gaming unit, which includes acquisitions like Bethesda and Activision Blizzard, has grown rapidly over the past few years.

With the integration of these acquisitions, the company is now cutting duplicate roles and restructuring internal game studios. The impact of layoffs in the Xbox division is still being assessed, but early reports indicate that several upcoming projects may face delays or reshuffling.

Microsoft has stated in earlier updates that the gaming sector remains a priority. However, the current round of layoffs seems to reflect an attempt to streamline teams and reduce overhead in an increasingly competitive market.

What This Means for Microsoft and Its Employees

If the estimates are accurate, this would be one of the biggest rounds of layoffs in Microsoft in recent years. Earlier in 2023, the company had already let go of nearly 10,000 employees globally as part of a cost-cutting drive. This fresh wave signals that Microsoft is not done resizing its teams.

For employees, this creates uncertainty, especially as AI continues to disrupt traditional job roles. For Microsoft, however, it may be a step toward aligning its workforce with future demands in AI and cloud infrastructure.

While the full scope of the layoffs is yet to be confirmed, it’s clear that Microsoft’s latest workforce decisions are part of a strategic pivot toward efficiency, innovation, and next-gen tech.