Microsoft is cutting roughly 3% of its global workforce as the company shifts more resources toward the race to develop advanced artificial intelligence, the company confirmed on Tuesday.
The layoffs will likely impact roughly 7,000 jobs across all divisions and locations of Microsoft’s global business, the tech giant said. The company, led by CEO Satya Nadella, had 228,000 employees worldwide as of last June.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement, first obtained by CNBC.
The layoffs are partially aimed at cutting layers of management at Microsoft, the spokesperson told the outlet.
The cuts were announced just days after Microsoft reported quarterly revenue of $70.07 billion, beating Wall Street’s expectations.
Microsoft representatives did not immediately return The Post’s request for further comment.
The layoffs are the most significant at Microsoft since January 2023, when the company slashed 10,000 jobs. The company had also announced a small round of performance-based layoffs earlier this year.
The company’s shares were flat in Tuesday trading.
Microsoft, one of the key backers of OpenAI, is locked in a fierce competition with Elon Musk’s xAI, Mark Zuckerberg’s Meta, Google and other companies developing AI tools.
Nadella’s firm has said it will spend up to $80 billion in fiscal year 2025 alone on AI-related efforts.
D.A. Davidson analyst Gil Luria recently suggested that layoffs would be necessary as Microsoft looks to offset the steep price tag to develop advanced AI.
“We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000 in order to make up for the higher depreciation levels due to their capital expenditures,” Luria said, according to Reuters.
Microsoft isn’t the only tech firm making cuts to its workforce. In January, Meta cut 5% of its staff as Zuckerberg looked to weed out what he described as “low performers.”
