Microsoft to Lay Off 3% of Workforce as Part of Cost-Cutting and AI Push

Microsoft is planning to lay off around 3% of its global workforce, according to a report by CNBC, as the technology giant restructures operations and intensifies its investment in artificial intelligence. The move is expected to impact roughly 6,800 employees across different roles, seniority levels, and geographic locations.

While Microsoft has not released an official statement, the CNBC report cites internal company communication confirming the decision. The layoffs come despite the company’s strong financial performance in recent quarters. Microsoft recently reported better-than-expected earnings, with significant growth in its Azure cloud services division, which has become central to its future business strategy.

As of June 2024, Microsoft had a total workforce of 228,000 employees, including 126,000 based in the United States, according to its annual filing with the U.S. Securities and Exchange Commission (SEC). The current round of job cuts reflects the company’s efforts to reallocate resources more efficiently as it doubles down on AI development.

 

Biggest Player in AI Space

In recent years, Microsoft has been one of the biggest players in the AI space. It has invested tens of billions of dollars into OpenAI, the maker of ChatGPT, and has been integrating AI capabilities into its core products like Microsoft 365, Windows, and its cloud platforms. The company’s partnership with OpenAI has allowed it to take a leadership position in the generative AI race, but it has also come with massive infrastructure and research costs.

Microsoft’s decision echoes a broader trend in the tech industry. Companies including Google, Amazon, and Meta have all announced layoffs in the past year as they trim operational fat while pivoting towards high-growth areas such as AI, cloud computing, and automation.

Despite the layoffs, Microsoft remains one of the most profitable and strategically positioned technology firms in the world. Analysts suggest that the restructuring may be aimed at maintaining its competitive edge in a rapidly evolving technological space. The layoffs are expected to be completed in phases over the coming months.

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