Microsoft Corp. is reportedly gearing up for another significant round of job cuts, with thousands of employees, particularly within its sales division, expected to be affected. This strategic move aligns with the tech giant’s aggressive investments in artificial intelligence, as the company seeks to streamline operations and rebalance its workforce amidst a rapidly evolving technological landscape.
Sources familiar with the matter indicate that the layoffs are anticipated to be announced in early July, coinciding with the conclusion of Microsoft’s fiscal year at the end of June. While primarily targeting sales and marketing roles, the reductions may extend to other departments as well, reflecting a broader organizational restructuring.
Funding AI Through Workforce Realignment
This forthcoming wave of layoffs follows previous workforce reductions earlier this year, including a substantial cut of approximately 6,000 employees in May, which predominantly impacted product and engineering teams. In April, Microsoft signaled its intention to transition parts of its small and medium-sized business (SMB) software sales to third-party vendors, a move that now appears to be a precursor to the current personnel adjustments within its sales force.
The primary driver behind these significant shifts is Microsoft’s fervent commitment to artificial intelligence. The company has earmarked a staggering $80 billion for capital expenditures in the current fiscal year, with the vast majority directed towards expanding data centers critical for supporting its burgeoning AI services.
To finance these colossal investments and maintain a competitive edge, executives are reportedly under pressure to curb costs in other operational areas, including headcount. This rebalancing underscores a clear strategic pivot, prioritizing AI development and infrastructure above certain existing roles.
Impact on Workforce and Broader Industry Trends
As of June 2024, Microsoft employed 228,000 individuals globally, with approximately 45,000 assigned to its sales and marketing division. The anticipated cuts will undoubtedly reshape the company’s internal structure, particularly its customer-facing operations.
Microsoft’s actions are part of a broader trend within the tech industry, where companies are increasingly realigning their workforces to adapt to the generative AI revolution. Amazon CEO Andy Jassy recently remarked that the advent of generative AI and AI agents is expected to lead to a decrease in the overall corporate workforce in the coming years.
While the pace of tech layoffs has slowed in 2025 compared to previous years, Microsoft, alongside companies like Intel, remains among the largest employers undertaking significant job reductions.
Microsoft has consistently stated that it regularly reevaluates its organizational structure to ensure investments are channeled towards areas poised for future growth. The company has yet to provide an official comment on the reported layoffs, maintaining a policy of not discussing internal personnel matters. However, the timing of these reported cuts aligns with Microsoft’s historical pattern of announcing major internal changes around its fiscal year-end.
This strategic recalibration underscores Microsoft’s determination to solidify its leadership position in the global AI race, even if it entails difficult decisions regarding its workforce. The company is actively investing billions in its cloud and AI infrastructure, aiming to build robust capabilities for the future, which necessitates a leaner, more AI-focused operational model.
