Microsoft is reportedly preparing for another job cut as the tech giant approaches the end of fiscal year 2025, indicating a new corporate restructuring. According to sources cited by Bloomberg, layoffs target thousands of roles and focus on sales. The company has not officially confirmed the move, but the timing coincides with the long-standing patterns at the end of each fiscal year and the patterns of reorganizing operations at the end of each fiscal year.
If implemented, the imminent cuts will be closely followed shortly after a major workforce cut in May, when Microsoft x around 3% of the world's personnel, which is about 6,000 positions. That previous round impacted a wide range of departments reportedly including engineering, customer support and marketing.
The Redmond-based company, which employs approximately 2,28,000 people as of June 2024, has had little change in employee numbers compared to the previous year. One of the company's largest, the sales and marketing segment, was flat on 45,000 employees (86,000) and 45,000 employees, after product research and development (81,000).
While Microsoft has not yet explicitly tied its recent layoffs to an increase in AI-driven automation, observers believe that the ongoing shift towards AI-driven automation may shape how the company is hoping for the workforce. A recent internal research paper published by Microsoft was directed towards a future in which smaller, AI-assisted teams become the norm for various sectors.
“Many companies are reevaluating their legacy structures in favor of a more agile, AI-enhanced approach,” the report says without referring to internal staff plans.
This restructuring trend reflects wider changes across the high-tech industry, increasing productivity, streamlining workflows, and relying on traditional human-heavy roles, particularly features such as sales, customer support, and management, to lean more and more towards generative AI and large-scale language models.
A key player in AI Arms Race, Microsoft has embedded AI in its suites over the past year, from Microsoft 365 and Azure to Copilot Productivity Assistant thanks to its multi-billion dollar partnership with Openai. While these tools are positioned as value ADDs for customers, they could also drive quiet transformations in the company's workforce structure.
Future work cuts, if confirmed, will mark yet another chapter in Microsoft's recent strategy of balancing ambitious technology investments with lean operating models. However, it can be a tough start to the summer for shooting line employees.
