Microsoft layoffs 9,000 employees in yet another round of job cuts this year. On July 2, Microsoft began its fiscal year and confirmed the layoff of 9,000 employees during the company call. The company has been implementing job cuts since 2024, but this time, it’s not performance-based. Microsoft said, roughly 4% of its total workforce will be affected by the new round of layoffs. According to a regulatory filing, 830 employees in Washington were affected by the layoffs.
Microsoft has already gone through several rounds of layoffs this year. In January, it let go of less than 1% of its staff based on performance reviews. Then in May, the company cut over 6,000 jobs, followed by at least 300 more in June. As of June 2024, Microsoft had about 228,000 employees. Last year, it also laid off around 10,000 people.
Microsoft Layoffs: 9,000 Employees Affected in Latest Round
Microsoft has announced plans to lay off 9,000 employees in the new round of job cuts, which is one of the largest layoff rounds in the company’s history. The company’s spokesperson said, “We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace.” Microsoft has hinted that layoffs will have an impact on multiple divisions of the company, but didn’t specify any teams.
According to Bloomberg reports, sales, marketing, and gaming teams will be highly affected by the job cuts. Wednesday’s layoffs were just under the 10,000 jobs Microsoft cut in 2023. But overall, in 2025, the company has already laid off more than 15,000 employees. This time, workers in Washington state weren’t hit as hard as they were in earlier rounds.
Microsoft Lays Off Gaming Division Amid Restructuring
Majorly, Microsoft is laying off its gaming division and shifting its focus to AI. Company’s gaming chief Phil Spencer has confirmed that his team has been affected by the layoffs. He said, “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.” Additionally, Spencer has acknowledged the success of the gaming division as they have more players, games, and gaming hours logged than ever before, followed by the recent cuts at the company.
As per reports, Candy Crush maker, King Division, will be cutting 10% of its team, around 200 employees. Other gaming units owned by Microsoft, like ZeniMax, have also confirmed the job cuts. Microsoft is also laying off over 70 employees at its Forza Motorsport studio, Turn 10. In addition, the company is canceling its Perfect Dark and Everwild games. As part of the cuts, the Initiative studio behind Perfect Dark is shutting down.
Microsoft Cuts Jobs as AI Automation Expands
Despite an unstable economy and market, Microsoft has managed to produce multibillion-dollar profits every quarter. As per the last earnings reports, the company represented great strength, which has driven its market valuation to $3.7 trillion. However, the company is investing a hefty amount of money in Artificial intelligence, which includes billions to build and maintain data centers.
The layoffs also suggest that Microsoft’s push into AI is starting to affect its workforce. Tools like GitHub Copilot, Microsoft’s AI assistant for coding, now have over 15 million users, and company leaders have praised how powerful it’s become. As Microsoft leans more into automation, some roles are being replaced, which could be one reason behind the job cuts. Despite the layoffs, Microsoft stock has remained strong, as investors see AI as a key driver of future growth.
