The job cuts are not performance-related, CNBC reported Tuesday (May 13), citing a Microsoft spokesperson.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” the spokesperson said, according to the report.
This round of layoffs will affect employees across all levels, teams and geographies, the report said.
It will be Microsoft’s largest round of layoffs since 2023, when the company eliminated 10,000 roles, and will follow a small number of cuts made in January that the firm said were performance-based, per the report.
Microsoft said April 30 that it will continue investing in capital expenditures throughout its fiscal year 2026 after seeing its cloud and artificial intelligence offerings lead its revenue gains in the third quarter of fiscal year 2025.
“These investments, along with focused execution that delivers near-term value to our customers, will ensure we continue to lead through the cloud and AI opportunity ahead,” Microsoft Chief Financial Officer Amy Hood said during the company’s quarterly earnings call.
It was reported in January that Microsoft planned to pause hiring in part of its U.S. consulting business and lay off less than 1% of its workforce. The hiring pause was part of the consulting division’s efforts to manage costs. The division also instructed employees to use remote sessions instead of travel for internal meetings, have executives authorize trips to customers’ sites, and make 35% cuts in marketing and nonbillable external resource spend.
When the company announced in January 2023 that it was laying off 10,000 workers, or about 5% of its workforce at the time, Microsoft CEO Satya Nadella said the company was seeing “significant” changes as customers optimized their digital spend to do more with less.
Microsoft cut about 1% of its staff in 2022 as part of a broader push to reduce expenses that also included a hiring freeze, as well as efforts to get staff to scale back on spending on things like travel, training and company events.
