Microsoft has announced plans to lay off up to 9,000 employees—approximately 4% of its global workforce—as the tech giant intensifies its focus on artificial intelligence (AI). The move marks the company’s fourth wave of job cuts in 2025 and underscores its strategic shift toward emerging technologies.
Though Microsoft did not disclose which departments would be most affected, industry insiders suggest the Xbox gaming division may be among those impacted. A company spokesperson stated, “We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.”
This latest round of layoffs follows the company’s May announcement of 6,000 job cuts. Public filings in Washington state also reveal that more than 800 positions will be eliminated in Microsoft’s key hubs of Redmond and Bellevue.
The job reductions come as part of Microsoft’s broader AI strategy, which includes a massive $80 billion (£68.6 billion) investment in building data centres to support AI model training and development. AI is now firmly positioned at the heart of Microsoft’s future plans, with British AI pioneer Mustafa Suleyman appointed last year to lead the company’s new Microsoft AI division.
A senior Microsoft executive emphasized the company’s long-term vision, telling reporters that AI will “fundamentally define the next half-century,” transforming how people work and interact.
Microsoft also holds a significant stake in OpenAI, the developer of ChatGPT. However, reports suggest there may be growing tensions within the partnership. According to Bloomberg, Microsoft’s in-house AI assistant, Copilot, has struggled to gain traction among business users, many of whom prefer ChatGPT.
The layoffs reflect a broader trend across the tech industry, where major players are racing to secure top-tier AI talent. Meta has reportedly offered signing bonuses exceeding $100 million (£74.3 million) to attract leading AI researchers, with CEO Mark Zuckerberg reportedly taking a hands-on role in recruitment. OpenAI CEO Sam Altman confirmed that several team members have received such offers.
Amazon has also acknowledged the shift. CEO Andy Jassy recently noted that AI will likely replace certain roles within the company over time, mirroring the growing transformation across the technology sector.
