Amid growing economic uncertainty and the soaring cost of artificial intelligence expansion, Microsoft has announced plans to lay off nearly 4% of its global workforce.
The technology giant confirmed the job cuts on Wednesday, saying they are part of its strategy to control costs while making significant investments in AI infrastructure.
The company, which employed approximately 228,000 people worldwide as of June 2024, had previously announced layoffs in May that affected around 6,000 workers, according to Reuters.
Last month, Bloomberg News reported that Microsoft was preparing to make thousands more job cuts, with a particular focus on sales roles.
Microsoft has pledged $80 billion in capital spending for its 2025 fiscal year, but the cost of scaling its AI systems has started to strain its margins. The company expects its cloud margin for the June quarter to shrink compared to last year.
Microsoft said on Wednesday it planned to reduce organisational layers with fewer managers and streamline its products, procedures and roles.
The Seattle Times first reported news of the latest cuts earlier on Wednesday. Separately, Bloomberg News reported that Microsoft’s Barcelona-based King division, which develops the popular Candy Crush video game, is laying off 10% of its staff, resulting in approximately 200 job losses.
Microsoft confirmed to Reuters that its gaming division has been affected by the layoffs, but added that the job cuts do not make up the majority of that business unit. The company did not provide further details.
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Other major technology companies that have made massive AI investments have also turned to job cuts in recent months.
Facebook’s parent company, Meta, said it would cut about 5% of its “lowest performers” earlier this year, while Google has laid off hundreds of employees over the past year. Amazon has made cuts across multiple business segments, most recently in its books division.
Across Corporate America, economic challenges and the rising cost of doing business have prompted many companies to reduce staff as they strive to streamline operations and safeguard their bottom lines.
[SAHARAREPORTER]
