Tech behemoth Microsoft is likely going to carry out a second mass layoff. This time, a Bill Gates-backed company is reportedly going to cut 9,000 jobs. This comes after 6,300 people were laid off at different teams, including high-profile roles from May to June. This will be the fourth round of layoffs by Microsoft in 2025 so far.
Microsoft Layoffs:
A person familiar with the matter told CNBC that Microsoft will lay off about 9,000 employees. The move will affect less than 4% of its global workforce across different teams, geographies and levels of experience. This announcement comes on the second day of Microsoft's 2026 fiscal year. Executives at the Redmond, Washington-based company typically unveil reorganisations at the time of the new fiscal year.
Earlier in June, Microsoft laid off 300 jobs, while its first mass layoff of 2025 was in May where 6,000 people were asked to leave, accounting for 3% of its workforce. However, Microsoft also carried out a small round of job cuts in January month as well.
This will be the biggest layoff by Microsoft after the mass firing of 10,000 employees in 2023.
Furthermore, Microsoft-backed Xbox's CEO Phil Spencer's email to the employees has gone viral, gaining criticism from gaming fans and gamers.
The email was sent to all Microsoft Gaming employees, and an anonymous source had passed it to Windows Central. Here's what it said:
"Today we are sharing decisions that will impact colleagues across our organisation. 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. Out of respect for those impacted today, the specifics of today's notifications and any organizational shifts will be shared by your team leaders in the coming days," Spencer's message to staff.
Earlier, Microsoft stated that making organizational changes is necessary to position the company for long-term success. Recently, CEO Satya Nadella also commented that about 20-30% of coding in some projects is already done by AI software.
Even on April 30, Nadella said, "Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth."
During its third quarter, Microsoft reported a 15% constant currency revenue growth to $70.1 billion while operating income surged by 19% to $32.0 billion in constant currency. Also, net income was $25.8 billion and increased 18% (up 19% in constant currency).
During the quarter, Microsoft 365 Commercial products and cloud services revenue increased 11% (up 14% in constant currency) driven by Microsoft 365 Commercial cloud revenue growth of 12% (up 15% in constant currency). Also, LinkedIn revenue increased 7% (up 8% in constant currency), while Dynamics products and cloud services revenue increased 11% (up 13% in constant currency) driven by Dynamics 365 revenue growth of 16% (up 18% in constant currency).
Windows OEM and Devices revenue increased 3%, whereas, Xbox content and services revenue increased 8% (up 9% in constant currency), and lastly search and news advertising revenue excluding traffic acquisition costs increased 21% (up 23% in constant currency).
By end of June 2024, it was known that Microsoft had 228,000 people.
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