Microsoft sends a brutal message to loyal employees

If you work in the tech industry and feel nervous about keeping your job this year, no one would blame you.

Once thought of as the most stable companies to get jobs with, tech behemoths like Meta, Amazon, Google, and Microsoft have all made layoffs in the first half of 2025, with some doing multiple rounds as the months have gone by.

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It's been devastating for tech professionals, many taking to LinkedIn to tell their stories of seeking new employment in a time when recruiters are struggling through unmanageable piles of AI-generated applications.

Another fear for those who are still employed is the AI boom, which many have predicted will significantly reduce the number of white-collar jobs.

Amazon CEO Andy Jassy reinforced the notion recently in a memo to employees, admitting the company's use of AI will reduce its needs for human help.

“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said. “It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”

Now another huge tech company is doing more layoffs — its fourth round this year.

Microsoft has more bad news for its workforce.

Image source: Shutterstock

Microsoft makes more cuts

Microsoft (MSFT) confirmed on June 2 that it plans to lay off less than 4% of its global workforce, or about 9,000 of its employees.

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This news comes two days into the new fiscal year, which is traditionally when the Redmond-based company focuses on cuts and optimizations.

These layoffs were predicted back in mid-June, per Bloomberg.

Some affected employees work for King, the mobile gaming company that makes the wildly popular “Candy Crush” games. About 200 employees, or 10% of King staff, will be affected.

These are not the only cuts that will impact Microsoft's gaming division, although the areas to be downsized are not yet confirmed.

Xbox leader Phil Spencer sent a message to the team, saying, “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.”

As noted earlier, Microsoft has already conducted three rounds of layoffs this year: 1% of employees in January for performance-based reasons, then another 6,000 jobs in May and 300 in June.

Why Microsoft keeps cutting its workforce

Typically, struggling companies are the ones to do major layoffs to improve their bottom line.

Microsoft, however, is thriving. It reported a 16% gain in revenue over its performance in 2023 with $245 billion in annual revenue and more than $109 billion in operating income — and that was before this year's layoffs even started.

It may make one question the tech company's end game, but the answer is fairly simple: it's refocusing its efforts in the direction it thinks matters most.

Microsoft said it plans to invest heavily in AI this year, with $80 billion devoted to building infrastructure to build AI-enabled data centers. These will be used both to train AI models and to deploy cloud and AI-based applications.

Simply put, Microsoft is cutting lines of business it sees as nonessential so it can focus more heavily on AI.

Microsoft stock took a small drop of 0.15% after the announcement, but for the most part is holding steady, indicating that investors quietly approve.