Microsoft reduces workforce as AI investments grow
Microsoft announced on Wednesday that it will reduce its global workforce by approximately 4%. This decision comes as the technology giant seeks to manage expenses amidst significant investments in its artificial intelligence infrastructure.
As of June 2024, Microsoft employed around 228,000 individuals worldwide. This latest round of layoffs follows a previous reduction in May that impacted about 6,000 employees. Last month, Bloomberg News reported that the company was preparing to eliminate thousands of positions, particularly within its sales department.
The software giant had committed to $80 billion in capital expenditure for its 2025 fiscal year. However, the substantial costs associated with expanding its AI infrastructure have pressured profit margins, with the cloud margin for the June quarter projected to be lower than the previous year.
On Wednesday, Microsoft stated its intention to reduce management layers and simplify its product offerings, operational procedures, and job roles. The Seattle Times initially broke the news of these layoffs earlier in the day. Separately, Bloomberg News reported that King, Microsoft's Barcelona-based division responsible for the popular game Candy Crush, is cutting 10% of its staff, which amounts to approximately 200 jobs.
Other major technology companies, also heavily investing in artificial intelligence, have likewise announced job reductions. Earlier this year, Meta, the parent company of Facebook, revealed plans to let go of about 5% of its "lowest performers." Similarly, Google, owned by Alphabet, has laid off hundreds of employees over the past year. Amazon has also implemented job cuts across various business units, most recently in its books division, following earlier reductions in its devices and services unit and among its communications staff.
.png "Advertisement")
