Microsoft Plans to Lay Off Thousands More Employees Due to AI Investments

Microsoft is preparing to lay off several thousand employees in the coming weeks as it continues its costly investments in artificial intelligence. The cuts will primarily affect the sales department and other teams, with the layoffs scheduled for early July, when the company begins its new fiscal year.

Another Wave of Layoffs on Top of Previous Cuts

This latest wave of layoffs comes in addition to approximately 6,000 positions that the company eliminated in May across product and developer roles worldwide. Microsoft has around 228,000 employees in total, including approximately 45,000 in sales and marketing.

The trend is not limited to Microsoft. Amazon.com CEO Andy Jassy announced on Tuesday that the company plans to reduce its workforce in the coming years as the growing use of AI eliminates the need for some positions. Companies ranging from retail to pharmaceuticals are beginning to develop plans to consolidate positions, aiming to handle more work with smaller teams and relying on technology for additional tasks.

"We remain focused on building high-performing teams and increasing our agility by reducing management layers," Microsoft Chief Financial Officer Amy Hood told investors and analysts in April. The company had already eliminated 10,000 jobs in January 2023 following a pandemic-era hiring surge at many technology companies.