Microsoft Lays Off 9,000 Workers

Microsoft has been investing heavily in artificial intelligence. (Dreamstime)

Microsoft is laying off slightly less than 4% of its global workforce—around 9,000 workers—in another major round of layoffs, the company confirmed Wednesday.

The layoffs are no surprise after The Wall Street Journal reported last month that Microsoft was planning to slash several thousand jobs. The move comes as tech companies trim headcount amid increased investments in artificial intelligence.

“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a spokesperson told Barron’s.

The company issued an identical statement in May, when it eliminated around 6,000 jobs. Microsoft, which kicked off its 2026 fiscal year on Tuesday, had roughly 228,000 workers as of the end of June 2024.

Microsoft stock was down 0.4% on Wednesday.

“Microsoft is managing its costs very carefully right now,” D.A. Davidson analyst Gil Luria told Barron’s. “The huge investment in data center capital expenditures is putting pressure on margins, and Microsoft has been able to offset that pressure by holding down personnel growth.”

AI tools, meanwhile, have allowed the company to achieve greater output with fewer workers, Luria said.

Rishi Jaluria of RBC Capital Markets agreed that Microsoft is focusing on efficiency in part to free up resources in what has become a “war for AI talent,” but pushed back on the idea that AI is directly replacing jobs.

“I would not read into this as Microsoft is laying off people because of AI,” Jaluria told Barron’s.

Write to Nate Wolf at nate.wolf@barrons.com