Microsoft is laying off around 9,000 employees, marking another significant round of job cuts as the tech giant reshapes its workforce for the future. This move affects fewer than 4% of its global team and touches employees across various departments, roles, and regions.
The announcement came just as Microsoft began its 2026 fiscal year, a time when internal changes like reorganizations and strategy shifts are often introduced.
Why the Layoffs Are Happening
In a brief statement, Microsoft said the job cuts are part of broader efforts to adapt to a rapidly changing tech industry.
“We’re making necessary changes to set our teams up for success in today’s dynamic market,” a Microsoft spokesperson explained.
This round of layoffs isn’t the first of the year. Microsoft has already trimmed its workforce in 2025 through several smaller rounds:
- January: Performance-based cuts affected under 1% of staff.
- May: Over 6,000 employees were let go.
- June: Around 300 more roles were eliminated.
Now, with this latest wave, the company continues to reshape how it operates.
A Focus on Cutting Layers of Management
One big reason behind the layoffs? Too many layers of management.
Microsoft is working to simplify how teams communicate and make decisions. By reducing the number of middle managers, the company hopes to boost agility and efficiency across departments.
In a memo to employees, Phil Spencer, the head of Microsoft Gaming, explained the reasoning:
“To help the gaming division grow and focus on what matters most, we’re reducing management layers and shifting focus to key areas,” he wrote.
Strong Financials Despite Job Cuts
It’s important to note that these layoffs aren’t about financial trouble. In fact, Microsoft is doing very well. Here’s a quick look at recent numbers:
- Revenue (March quarter): $70 billion
- Net profit: Nearly $26 billion
- Stock price: Hit a record high of $497.45 on June 26
The company also expects 14% revenue growth for the June quarter, thanks largely to strong performance from Azure cloud services and software tools like Microsoft 365.
Microsoft Isn’t Alone in Cutting Jobs
While Microsoft’s layoffs are getting attention, other tech companies are making similar moves in 2025. Companies like:
- Autodesk
- Chegg
- CrowdStrike
…have all reduced headcounts recently.
Meanwhile, ADP, a major payroll provider, shared data showing the U.S. private sector actually lost 33,000 jobs in June — even though experts had expected an increase of 100,000. This points to broader economic shifts affecting the tech sector and beyond.
The Bigger Picture
Microsoft’s layoffs aren’t just about cutting costs — they’re about refocusing the business.
By simplifying its structure and realigning teams, the company is preparing for what’s next. Microsoft is still heavily investing in areas like:
- Cloud computing (Azure)
- AI-powered tools
- Gaming
These are growth areas where Microsoft sees long-term opportunity, and the company wants to make sure it’s ready to lead.
What This Means Going Forward
While losing a job is never easy — and 9,000 is a big number — Microsoft says it’s thinking long-term. The changes may help the company stay agile, competitive, and better positioned in the market.
These layoffs are part of a broader trend in tech where companies are being more strategic about where they invest, and how they operate.
Quick Summary
- Microsoft is cutting 9,000 jobs (less than 4% of staff).
- The layoffs are part of a larger restructuring effort.
- The company is removing layers of management to streamline teams.
- Financially, Microsoft remains very strong.
- Other tech firms are also downsizing in 2025.
- The focus is now on growth areas like Azure, AI, and gaming.
Final Note
This might seem like a step back, but for Microsoft, it’s a step toward building a more focused, responsive, and future-ready organization.