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Microsoft will cut 3 per cent of its global workforce, the latest round of job cuts at a Big Tech company, as it seeks to streamline operations and pare layers of middle management.
The Redmond, Washington-based group said on Tuesday that it would eliminate about 6,000 roles, including at international offices and wholly-owned subsidiaries such as LinkedIn. The moves follow performance-related job cuts this year that affected about 2,000 Microsoft employees.
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” the company said in a statement.
Microsoft has joined the likes of Amazon and Meta in eliminating thousands of roles as technology companies continue to rebalance the workforce amid significant investments in artificial intelligence and heightened competition with start-ups including OpenAI.
Meta branded about 5 per cent of the company’s low performers before then firing them this year. The company — which said in a regulatory filing it had about 74,000 employees at the end of 2024 — already cut almost a quarter of its employees in the past few years.
Amazon chief Andy Jassy said last year that the company was striving to “eliminate bureaucracy” and would pursue a flatter structure with less middle management. The ecommerce giant eliminated 27,000 roles in two major rounds of job cuts in 2023, while Amazon Web Services slashed hundreds of roles in 2024.
Microsoft posted better than expected earnings in the three months to the end of March, with the company lauding strong growth in its cloud division. Its shares have outperformed peers since the beginning of this year, and the software giant recently reclaimed the title of the world’s most valuable company.
Chief financial officer Amy Hood told investors last month that Microsoft was focused on “building high-performing teams and increasing our agility by reducing layers with fewer managers”.
The company last year cut some 2,500 roles from its Xbox gaming unit following its acquisition of publisher Activision Blizzard. It cut about 1,000 roles across its HoloLens augmented reality headset and Azure cloud computing units in the same period.
In 2023, Microsoft said it would let go of 10,000 employees as it dealt with slower revenue growth.
Microsoft did not confirm whether Tuesday’s announcement was prompted by AI-led efficiencies, though chief executive Satya Nadella said earlier this year that between 20-30 per cent of the company’s code was written using these tools.
Rishi Jaluria, an analyst at RBC, said that the job cuts represented a counterweight to AI infrastructure spend and that he anticipated headcount would still grow this year but at a slower pace due to increased efficiencies.
“These quasi conglomerates just have too many layers,” Jaluria said.
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