Microsoft has conducted 15,000 layoffs and job suspensions this year alone. The Redmond-based tech giant is undergoing a significant transformation. According to a report by The Verge, Microsoft is boosting AI investments by laying off thousands of employees. Microsoft isn’t the only company doing this, as Intel also plans to lay off 24,000 by the end of 2025, as it’s also boosting AI investments.
Microsoft’s 2025 layoffs to expand AI investment have affected many departments
As per The Verge’s Tom Warren, Microsoft’s leadership team had a choice between either reducing investment in AI infrastructure or laying off employees and deeply cutting operating expenses. It’s quite clear which route Microsoft chose. This year’s layoffs have affected thousands of Microsoft employees across departments, including sales, marketing, and management.
While the company has relocated some employees, the massive scale of job reductions underscores Microsoft’s clear choice of prioritizing AI investment over maintaining existing staff levels. The decision has also impacted the company’s Xbox gaming division. The brand has already cancelled several games, laid off gaming division employees, and shut down various studios.
Microsoft’s layoffs come at a time when many game companies are betting big on AI investments. Companies like Sony and EA have invested heavily in AI, with the latter having over 100 projects in development. Microsoft is also pushing its MUSE generative AI tech, which can create gameplay in real-time without the requirement of any coding or development tools.
Furthermore, the report suggests that Microsoft has let go of technical specialists, business experts, and product managers. The layoffs have hit the company’s sales team, which is responsible for driving business for its latest technology, hard. It’s clear that the massive lay off decisions are part of Microsoft’s AI investment strategy.
The layoffs come at a time when Microsoft is enjoying strong financial performance
It’s worth mentioning that Microsoft is laying off thousands while it is enjoying some strong financial performance. The company has reported nearly $75 billion in net income over the past three financial quarters. Meanwhile, the brand is putting a massive amount of $80 billion into AI infrastructure.
That said, in a memo sent to employees recently, Microsoft CEO Satya Nadella has addressed the recent spike in job cuts at the company. Nadella acknowledged the concerns, saying, “Before anything else, I want to speak to what’s been weighing heavily on me and what I know many of you are thinking about: the recent job eliminations.”
Nadella stated that this move is crucial for the brand’s AI transformation. He emphasized the need for both learning and unlearning. He also thanked departing employees for their contributions.
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