Microsoft to Cut Up to 9,000 Jobs Amid Accelerated AI Investment
Tech giant Microsoft has announced plans to lay off as many as 9,000 employees, as the company continues to restructure its workforce to align with its expanding ambitions in artificial intelligence (AI).
The job cuts, which represent about 4% of Microsoft’s global workforce of 228,000, mark the fourth round of layoffs the company has initiated in 2025 alone. In May, the company confirmed the loss of 6,000 jobs, adding to a string of reductions across various tech firms navigating industry shifts.
While Microsoft has not publicly confirmed which departments will be impacted, reports indicate that its Xbox gaming division is likely to be among those affected. A significant portion of the layoffs – over 800 roles – will impact employees in Redmond and Bellevue, Washington, where Microsoft maintains key offices, according to filings in the state’s Worker Adjustment and Retraining Notification (WARN) database.
A spokesperson for the company said the changes are part of an ongoing strategy to adapt to a rapidly evolving tech landscape:
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.”
The announcement comes as Microsoft intensifies its multi-billion dollar push into AI, including a planned $80 billion investment in building next-generation data centres to support the training of AI models. The company is also investing heavily in developing AI chips and infrastructure, part of a broader industry-wide race to dominate the future of intelligent computing.
Microsoft’s growing focus on AI was underscored by its 2023 hiring of British AI pioneer Mustafa Suleyman, co-founder of DeepMind, to lead its newly formed Microsoft AI division. Earlier this year, a senior executive at Microsoft said the “next 50 years will be fundamentally defined by artificial intelligence.”
The company is also a major backer of OpenAI, the developer of ChatGPT. However, recent reports suggest friction has emerged in their partnership, particularly as Microsoft has struggled to convince enterprise clients to adopt its own AI assistant, Copilot, with many favouring ChatGPT instead.
Across Silicon Valley, the competition for elite AI talent is intensifying. Meta has reportedly offered signing bonuses exceeding $100 million to lure AI researchers away from competitors, while Amazon CEO Andy Jassy recently acknowledged that AI is likely to replace some roles within his company.
As Microsoft pushes forward with its AI transformation, the workforce reshuffle reflects a broader trend in the tech industry – streamlining traditional operations while ramping up investments in what many see as the next frontier of digital innovation.
