Microsoft is back in the headlines today, this time for thousands of layoffs. On May 13, 2025, the tech giant confirmed it’s cutting 3% of its workforce across all divisions and regions.
That’s roughly 6,800 employees out of the 228,000 global headcount reported last June. The move comes just months after strong earnings, with the company posting $25.8 billion in net income last quarter and boasting record stock prices earlier this year.
But don’t be fooled by the healthy financials, this wave of layoffs is strategic. And unlike earlier cuts based on performance, this one targets management layers and overall company structure.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson told CNBC.
Why Microsoft Is Doing This Now
Microsoft CEO Satya Nadella hinted at these changes back in January, especially after Azure cloud growth missed expectations in some areas, excluding AI, which remains red hot.
The goal now? Simplify. Streamline. Stay competitive.
- Too many managers: Like Amazon and other tech players, Microsoft wants to flatten internal hierarchies.
- Faster execution: The company is focusing on tweaking sales incentives and updating its go-to-market strategies.
- AI-first shift: With AI now driving much of the company’s innovation (and stock growth), legacy teams that aren’t keeping up may be trimmed or reorganized.
This marks Microsoft’s largest round of layoffs since the 10,000-job cut announced in early 2023. A smaller performance-based round also took place in January 2025, but today’s move is bigger and broader.
Microsoft Isn’t Alone
The job cuts come during a fresh wave of tech-sector belt-tightening:
- CrowdStrike cut 5% of its staff just last week.
- Amazon has been eliminating roles in HR and other departments due to “organizational bloating.”
- Google, Meta, and Salesforce have also slashed headcount in 2025, despite strong earnings reports.
What’s clear? Tech’s boom cycle of unlimited hiring is long gone. Efficiency is the new name of the game.
Investors Still Bullish
Oddly enough, the layoffs haven’t spooked Wall Street.
Microsoft stock closed at $449.26 on Monday, near its 2025 peak and not far off the record $467.56 set in July 2024. Many analysts see these cuts as a sign the company is doubling down on long-term profitability, especially in AI.
“Microsoft will continue as the best-performing mega-cap stock in 2025,” said D.A. Davidson analyst Gil Luria on CNBC, citing its aggressive push in artificial intelligence and enterprise solutions.
What’s Next for Employees?
Microsoft hasn’t detailed exactly which departments or roles are impacted, but insiders say the cuts are widespread, hitting tech, sales, support, and middle management. Severance packages are expected to be offered, and some roles may be relocated rather than eliminated outright.
One thing is certain: This isn’t the end of Microsoft’s restructuring. Nadella’s leadership playbook for 2025 seems laser-focused on:
- Streamlining processes
- Emphasizing AI and cloud innovation
- Shedding legacy practices and teams
And in a year where AI is driving market hype and investor enthusiasm, Microsoft appears determined not to get left behind.
Leo Cruz brings sharp insights into the world of politics, offering balanced reporting and analysis on the latest policies, elections, and global political events. With years of experience covering campaigns and interviewing world leaders, Leo ensures readers are always informed and engaged.
