Microsoft Layoffs Top 15,000 in 2025 as AI Reshapes Strategy
- Microsoft has laid off more than 15,000 employees in 2025, with 9,000 affected in the latest round.
- CEO Satya Nadella cites the transition from a software company to an AI-focused 'intelligence engine' as central to the restructuring.
- Despite internal criticism and employee concerns, Microsoft’s stock closed above $500 for the first time following the layoffs.
Microsoft has laid off over 15,000 employees so far in 2025, signaling a major recalibration within the tech giant as it pivots deeper into artificial intelligence. The latest round of layoffs, affecting approximately 9,000 employees earlier this month, pushed investor confidence, sending Microsoft’s stock soaring to close above $500 for the first time on July 9.
In a candid memo sent to employees on Thursday, CEO Satya Nadella acknowledged the emotional and professional toll of the ongoing workforce reductions. “Before anything else, I want to speak to what’s been weighing heavily on me, and what I know many of you are thinking about: the recent job eliminations”, Nadella wrote.
Despite these significant cuts, Nadella maintained that Microsoft’s overall headcount remains 'basically flat' compared to June 2024, when it reported employing 228,000 people. The layoffs are part of a broader tech industry trend in 2025, with over 80,000 jobs lost across major companies, including Recruit Holdings the parent company of Indeed and Glassdoor which cited artificial intelligence as a factor behind its recent 1,300 job cuts.
Nadella described the situation as part of the paradox of success in an industry with 'no franchise value'. “Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding. But it’s also a new opportunity for us to shape, lead through, and have greater impact than ever before”, he said.
Microsoft’s cost-cutting has drawn concern and criticism internally, with employees taking to platforms like LinkedIn to express disillusionment. “I have loved working for this company, still do, but this has done so much damage to that loyalty because it has shown that Microsoft’s espoused values do not apply to business decisions at the macro level”, one employee posted.
The layoffs come at a time when Microsoft is more valuable than ever. It holds the title of the world’s second-most valuable public company after Nvidia, whose AI-focused chips have become crucial in today’s tech landscape. Microsoft’s own AI ventures, including its partnership with OpenAI and expanded Azure services, have played a pivotal role in its recent growth trajectory.
Reflecting on Microsoft’s decade-long mission “to empower every person and every organization on the planet to achieve more”, Nadella said the company must now adapt its vision for the AI era. “It’s not just about building tools for specific roles or tasks. It’s about building tools that empower everyone to create their own tools”, he said.
Microsoft is set to report its fiscal fourth-quarter earnings on Wednesday.
