Microsoft has announced its second significant round of layoffs in recent months, affecting approximately 9,000 employees, or nearly 4% of its global workforce.
The technology firm began issuing layoff notices on Wednesday 2 July 2025, impacting divisions such as its Xbox video game segment and other departments, reported The Associated Press. This wave of job cuts is the largest the company has implemented in more than two years.
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The layoffs will impact various teams worldwide, including the sales division, as part of organisational adjustments aimed at enhancing Microsoft’s competitiveness in a rapidly changing market.
In a memo to staff within the gaming division, Xbox CEO Phil Spencer mentioned that these changes are intended to steer the business towards long-term success by focusing on strategic growth.
The layoffs also include 830 employees from Microsoft’s headquarters in Redmond, Washington, as per a notification sent to state officials.
The company did not disclose the total number of layoffs but confirmed it represents about 4% of the workforce reported a year ago, when Microsoft had 228,000 full-time employees as of June 2024.
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By GlobalDataMicrosoft had previously laid off around 6,000 workers in May 2025, marking its largest job reduction in more than two years before this current announcement.
In addition, Microsoft’s Spain-based King division, responsible for developing the Candy Crush video game, is reducing its workforce by 10%, equating to roughly 200 positions.
These recent cutbacks coincide with Microsoft’s continued substantial investments in data centres and AI infrastructure components like specialised computer chips. The company expects these expenses to amount to approximately $80bn in the current fiscal year which commenced earlier this week.
Financially, Microsoft reported significant growth in its third-quarter results for fiscal year 2025. Revenue reached $70.1bn, marking a 13% increase from the previous year. Net income rose by 18% to $25.8bn, with operating income growing by 16% to $32bn.
The tech giant attributed this positive performance to heightened demand for AI solutions and sustained adoption of cloud infrastructure by enterprises.
