Employee morale is low, and the cuts keep coming—2025 is making it harder than ever to stay employed. A new Microsoft layoff report suggests the company isn’t done with its job cuts just yet, setting its sights on its sales personnel this time. To increase investments in artificial intelligence and streamlining the business better, Microsoft is expected to conduct more layoffs next month, where thousands of workers could receive notice to leave.
Very recently, the tech giant laid off over 6,000 employees across its company as a way to manage its expenses and realign its spending on more relevant areas of the business. The announcement of Microsoft’s workforce reduction plans did not include an exact headcount, but the cuts will primarily focus on sales workers, with some additional cuts in other areas as well. Earlier this month, reports emerged that Microsoft was also considering layoffs at its gaming division, Xbox, but it’s unclear how many will be affected here as well.
Microsoft staff are losing morale as the layoffs continue. (Image: Pexels)
Microsoft Layoff Report—More Inevitable Cuts are on the Way
We have very little to go on in terms of the most recent Microsoft layoff report, but Bloomberg News was able to talk to insiders and confirm that the cuts were indeed coming. The only specifics available as of now are that the cuts will be announced at the beginning of July and that the sales team will be among those primarily affected. The company reportedly had 228,000 workers at the end of June last year, and we expect the numbers will be much lower this time around.
The company’s 2025 fiscal year ends on June 30, and it is expected that the announcement of its financial numbers will include job cuts to support the company’s plans for the next year. As of now, Microsoft has not confirmed the reports regarding future layoffs, but most experts believe that these restructuring efforts are inevitable.
Just last month, the company laid off about 3% of its workforce, totaling around 6,000 workers, and it has made similar moves across various divisions since 2024. Microsoft appears to be staggering its job cuts through the year to minimize the impact on its business, making planned slashes that can be studied and then duplicated in other divisions one by one.
Unfortunately for tech workers, Microsoft is not alone in this. From Google to Meta, most tech giants are exploring how to bring their numbers down gradually so investments can be made in AI.
AI Leads the Way For the Tech Industry
Artificial Intelligence makes for an unwieldy tool, but tech firms are working hard to try and gain some control over it. Most organizations that have funds to spare have invested in AI, not just bringing in external tools but developing their own as well. Amazon CEO Andy Jassy recently made it clear that the e-commerce giant was going all-in on AI and would eventually expand to a point where it could comfortably bring its headcount down. His statement made it clear that many roles could soon become redundant because of AI tools that could be relied on to perform those roles.
OpenAI, the top leader in the category of AI, recently claimed that some of its employees had been offered as much as $100,000 by competitor Meta. Over the last few months, Meta has been working hard to build its AI “Superintelligence” team, and it isn’t above poaching employees from other organizations to make it happen.
The scale of investments being discussed is staggering, but they also show us just how in-demand AI experts and researchers are. It is also important to note that while there are impressive investments in human capital, a major chunk of the money is directed at other AI resources.
AI Investments Aren’t Exclusively for Workers in the Industry
A large chunk of the investments being made in AI are reserved for building up data centers that can meet the processing needs of their tools, which is primarily the reason resources are being drawn from other departments.
Microsoft had plans to invest over $80 billion in its infrastructure for AI and cloud capacity, according to Reuters. It is unclear just how much of those investments have been made, as reports also suggest the company has cancelled at least two of its leases for data centers. In many ways, businesses appear to be overestimating their AI capabilities and needs, rushing too quickly to sink money into it in hopes of reaping its benefits. This isn’t an ideal strategy, and organizations need to plan their investments more carefully.
The report of the Microsoft layoffs makes it clear that businesses are willing to make compromises with their workforce in order to ensure they continue to thrive in the AI industry. Some workers who can adapt to the field do stand to gain from the shift in priorities; however, tough times are expected in other fields.
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