Microsoft will eliminate about 4% of its worldwide staff because its extensive artificial intelligence investments have led to significant cost increases. The company will eliminate approximately 9,100 positions from its workforce of 228,000 employees as part of its latest round of job cuts which occurred shortly after the May reductions.
The company has dedicated $80 billion of its fiscal 2025 capital budget to build its AI infrastructure yet this investment pressure is negatively affecting cloud profit margins. Microsoft announced the layoffs will simplify organizational structures while making product development and managerial positions more efficient.
Bloomberg sources indicated Microsoft would reduce its sales division as part of its planned workforce reductions. The King division in Barcelona which operates the successful Candy Crush game will cut 10% of its workforce through layoffs affecting approximately 200 employees.
Microsoft is not alone. The past year has seen workforce reductions at Meta, Alphabet and Amazon because of both cost pressures and their strategic shift toward AI development. The technology sector has made efficiency its primary focus because cloud and AI services continue to grow despite rising expenses.
