Microsoft layoffs: ‘Thousands’ more job cuts coming in sales and other teams next month amid heavy AI spending

After cutting 6,000 employees in May, tech giant Microsoft Corporation plans to layoff “thousands” more jobs next month, particularly in sales, Bloomberg reported on June 19, citing sources.

This comes as the company looks to “trim its workforce” amid increased spending on artificial intelligence (AI), it added.

Microsoft decline to comment on Bloomberg's queries regarding the matter, the report said.

More layoffs at Microsoft: What we know so far…

Sources told BB the cuts are expected early in July, following the end of Microsoft’s fiscal year.

The layoffs are expected to be across teams, with major hits likely among sales employees, they added. The sources also said that the timing of the job cuts could change.

Microsoft layoffs: 6,000 jobs cut in May

Just earlier in May, Microsoft had a major round of terminations that impacted 6,000 jobs or 3 per cent of its workforce, mostly in product and engineering teams, while sparing customer-facing roles such as sales and marketing.

Prior to that, in April, the Silicon valley giant had informed employees it plans to contract third-party firms to handle more sales of software to small and mid-size customers.

Microsoft has said it regularly reevaluates the organisational structure to make sure it’s investing for growth. As the company spends tens of billions of dollars on servers and data centers, executives have pledged to Wall Street, and warned employees, that it would keep a lid on spending in other areas.

CEO Satya Nadella outlines reason, says not reflection of performance

After the 6,000 jobs were cut, during a townhall Microsoft CEO Satya Nadella told attendees that the company’s decision was part of a broader internal restructuring and not a reflection of employee performance.

He added that the layoffs were necessary to realign teams in accordance with Microsoft’s evolving priorities, particularly its growing focus on AI. He also acknowledged the emotional toll of the decision but underscored that it was driven by strategic shifts, not shortcomings in productivity or talent.

Till June 2024, the company had 2,28,000 employees in sales and marketing.

(With inputs from Bloomberg)