Microsoft has announced a second major round of Microsoft layoffs (M.S.) in 2025, laying off nearly 9,000 employees worldwide across several divisions in a broad and calculated move. The company, which as of June 2024 had about 228,000 full-time employees, acknowledged that this layoff affects nearly 4% of its workforce.
The tech giant’s aggressive restructuring plan aimed at sharpening its focus on artificial intelligence (AI), cloud infrastructure, and long-term innovation is highlighted by the announcement on July 2, which marks at least the fourth such workforce reduction in 2025 alone.
This most recent round, which follows a prior round of microsoft layoffs earlier this year, is indicative of broader trends in the technology sector as businesses reallocate resources to high-growth sectors. This is Microsoft’s second large layoff in months, with thousands of employees being let go.
Microsoft Layoff notices were sent out by the tech giant on July 2, 2025. Although the company would not disclose the exact number of layoffs around more than 9000, it stated that it would be less than 4% of its workforce from a year ago. On the second day of its fiscal year 2026, announced Microsoft layoffs. Restructurings are usually announced by the company executives during the new fiscal year in Redmond, Washington.
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According to a person familiar with the situation, who spoke on condition of anonymity to discuss internal matters, Microsoft is looking to cut back on both the number of top-level directors and individual contributors, similar to the May layoffs.
“To position Gaming for enduring success and allow us to focus on strategic growth areas, we will 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,” Xbox CEO Phil Spencer wrote in a message to the team.
Microsoft CEO Satya Nadella addressed employees in a company-wide memo, stating:
“We are making tough decisions today to invest in our future. Our focus is on aligning talent with priority growth areas like AI, Copilot, and cloud services. These changes, while difficult, will help us serve our customers better in the long run.” Also said earlier this year that “maybe 20, 30% of the code” for some of Microsoft’s coding projects “are probably all written by software.”
Following the news of Microsoft layoffs, premarket trading saw a brief drop in Microsoft stock ($MSFT), but it quickly rebounded, demonstrating investor confidence in the company’s long-term AI-focused strategy. Microsoft reported nearly $26 billion in net income on $70 billion in revenue for the March quarter, which was much higher than what Wall Street had predicted. These results validate Microsoft’s standing as one of the stock market index’s highest-profit companies.
Microsoft is not alone; as part of their efficiency and innovation initiatives, other tech companies like Google, Meta, and Amazon have also announced large layoffs in 2025. These patterns point to a shift in the industry as automation and generative AI shape labor demands.