Microsoft to implement fresh layoffs, targeting underperforming employees: Report

Microsoft is set to initiate another round of job cuts, primarily targeting employees deemed underperforming, according to a report by Business Insider. While the tech giant has repeatedly confirmed the impending layoffs, it has refrained from disclosing the exact number of individuals affected.

As per the report, a Microsoft spokesperson affirmed the move, stating that the company remains committed to retaining high-performing talent. “When employees fail to meet performance expectations, appropriate actions are taken,” the spokesperson added.

Impact on Key Divisions

According to the report, the restructuring would impact several departments, including the critical Security division. Microsoft’s performance evaluations span all levels of the organisation, reportedly even affecting some senior staff at level 80.

Despite these cuts, Microsoft indicated that roles vacated through performance-based exits are often replaced by new hires. The report added that the company’s global headcount—estimated at around 228,000 employees as of mid-2024—may remain relatively stable.

Layoffs Under Nadella’s Leadership

This latest move is consistent with Microsoft’s history of workforce restructuring under CEO Satya Nadella. Since his appointment in 2014, Nadella has overseen multiple rounds of layoffs, beginning with a significant cut that year, which saw 18,000 employees—approximately 14 per cent of the workforce at the time—being let go.

In recent years, strategic job reductions have spanned multiple sectors. In 2023, Microsoft laid off roughly 10,000 employees across divisions, including Xbox. Following its acquisition of Activision Blizzard, the company eliminated nearly 2,000 gaming roles in early 2024.

Further cuts continued during the summer of 2024, with approximately 1,000 employees from the Azure cloud services division being laid off. September 2024 brought additional reductions, as 650 staff members from the Xbox division were let go, bringing the total number of gaming-related layoffs for the year to nearly 3,000.

Strategic Focus Amid Restructuring

This restructuring underscores Microsoft's focus on optimising workforce performance and aligning resources with strategic goals. While the company has historically prioritised innovation and growth, these periodic layoffs reflect its stringent focus on maintaining operational efficiency.