TEMPO.CO, Jakarta - Microsoft announced a mass termination of employment affecting over 6,000 employees, approximately three percent of its global workforce, on Tuesday, May 13, 2025. This marks the largest wave of layoffs since 2023 when Microsoft laid off 10,000 employees.
"We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace," said Microsoft spokesperson Pete Wootton as reported by The Verge on Tuesday, May 13, 2025.
These layoffs will impact every division of the company, including Microsoft-owned LinkedIn and several international offices. The announcement comes just weeks after Microsoft's CFO, Amy Hood, hinted at reductions in management layers.
"We continue to focus on building high-performing teams and increasing our agility by reducing layers with fewer managers," said Hood on Wednesday, April 30.
Earlier this year, Microsoft also conducted "performance-based" cuts targeting hundreds of employees. This latest wave of reductions follows more than a year after Microsoft laid off 1,900 employees from its Activision Blizzard and Xbox divisions.
Furthermore, in May 2024, the company closed several game studios, including Hi-Fi Rush developer Tango Gameworks and Redfall developer Arkane Austin. Tango Gameworks later resumed operations through a partnership with Krafton.
Microsoft also laid off an additional 650 employees from the Xbox team in September as part of a restructuring related to the Activision Blizzard acquisition. Additionally, approximately 1,000 employees from the HoloLens and Azure Cloud teams were affected in June.
Meanwhile, as reported by India Today on Tuesday, May 13, 2025, Microsoft has its own reasons for trimming thousands of employees despite rapid growth, particularly in the field of artificial intelligence (AI).
Microsoft stated that these layoffs are part of organizational changes necessary to navigate an increasingly AI- and cloud-driven future. However, the company acknowledges that building this future comes with costs.
Currently, Microsoft is investing tens of billions of dollars to build data centers and infrastructure to support the continued growth of AI services and tools. Reports suggest that Microsoft's capital spending this year could reach around US$80 billion, with most of it allocated to AI expansion.
This strategic move is crucial for Microsoft to remain competitive with Google, Amazon, and Meta. However, a consequence of these investments is increased operating costs and shrinking profit margins.
It is worth noting that Microsoft is not alone in this trend. Many Silicon Valley companies are aggressively investing in AI while simultaneously reducing their workforce. Google, Meta, and Amazon have all conducted mass layoffs of thousands of employees in the past two years, despite continuing to pour funds into generative AI, cloud services, and new data centers.
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