Microsoft announced on Tuesday it is cutting 3% of its global workforce, or more than 6,000 jobs, as part of an effort to streamline operations by reducing management layers. Software engineering and product management roles were among the most impacted.
Most affected employees were in-office workers
The job cuts span multiple levels, teams, and geographies, with a focus on managerial positions, according to Bloomberg. Of the employees based in Washington, about 1,500 affected employees worked at Microsoft’s offices, while 475 were remote workers. Business divisions, including Xbox and LinkedIn, were among those affected.
The company is “building high-performing teams and increasing our agility by reducing layers with fewer managers,” Chief Financial Officer Amy Hood said during an April earnings call.
SEE: The IT labor force decreased to 4.6% in April in the US
The layoffs were described as “organizational changes necessary to best position the company for success in a dynamic marketplace,” an anonymous company spokesperson told The Associated Press.
Microsoft’s evolving workforce strategy
Microsoft previously eliminated about 10,000 jobs in early 2023, part of a wave of tech layoffs in the wake of the pandemic. High demand for entertainment and services that could be used at home created a tech boom during the height of COVID-19, while some tech companies and video game makers let go of some employees they hired during the pandemic as the world opened up again. Managerial roles added to handle larger headcounts and more experimental team structures may have been trimmed down.
Microsoft is writing 20-30% of coding projects with generative AI, though the company has not made a statement regarding whether the May headcount reduction is related to efficiencies gained by or seats moved around because of generative AI. As The Associated Press noted, current AI models are not equipped for managerial tasks. In March 2025, Bill Gates predicted that coders would be one of the three job roles that were safe from being replaced by AI.
Hood said Microsoft’s total headcount in March 2025 was 2% higher year over year compared to March 2024.
First quarter sales for Microsoft were strong, with profits exceeding Wall Street expectations in recent weeks.