Microsoft Cuts 9,000 Jobs to Streamline Operations in Fiscal 2025
- Microsoft laid off 9,000 employees as it began its fiscal year, bringing total 2025 job cuts to over 15,000.
- The layoffs aim to flatten management layers and improve agility, not due to employee performance.
- Cuts affected multiple divisions, including sales, marketing, and gaming, though fewer Washington-based employees were impacted this round.
Microsoft began its new fiscal year with a major round of layoffs, cutting approximately 9,000 jobs, or about 4% of its global workforce, in an effort to streamline operations and reduce management layers. The move marks another significant phase in one of the largest job reduction efforts in the company’s history.
The latest layoffs come on the heels of workforce reductions in May and June, during which Microsoft let go of over 6,000 employees. With Wednesday’s announcement, the total number of job cuts since May has climbed to more than 15,000 companywide, including over 3,100 in Washington state, where Microsoft is headquartered.
According to a regulatory filing, 830 employees in Washington were impacted in the latest round. However, the state saw a smaller share this time compared to previous rounds. Only about 9% of Wednesday’s affected employees were based in Washington, whereas earlier layoffs saw the state account for roughly a third of all cuts.
Microsoft has reiterated that the layoffs are not performance-related but part of a broader strategy to boost agility and simplify its organizational structure. In April, during an earnings call, Chief Financial Officer Amy Hood hinted at the restructuring, citing the need to build 'high-performing teams' and reduce management layers to enhance margins.
While the company did not specify which divisions were most affected, reports from Bloomberg in recent weeks indicated that employees in sales, marketing, and gaming divisions bore the brunt of the cuts. Microsoft Gaming CEO Phil Spencer confirmed layoffs within his teams and acknowledged the paradox of layoffs amid the division’s current success.
Spencer stated, “Our platform, hardware, and game roadmap have never looked stronger”, crediting the current momentum to 'tough decisions' made earlier. He added that Microsoft will focus on protecting what is thriving while reallocating efforts to areas with the most growth potential.
The restructuring, he noted, will 'end or decrease work in certain areas of the business' and align with Microsoft’s wider aim of eliminating excessive layers of management.
Microsoft employed more than 228,000 people globally as of June 2024. With this latest round of layoffs, the company’s total job reductions in 2025 now exceed those announced in 2023, when 10,000 employees were let go.
As Microsoft sharpens its focus on operational efficiency and long-term business priorities, the company appears committed to difficult workforce decisions in pursuit of leaner, more agile operations.
