Microsoft Layoffs 2025: Over 15,000 Jobs Cut Amid AI Expansion

Microsoft has once again made headlines, not just for its Xbox Series X|S price increase, but also for the ongoing series of layoffs that have hit the company throughout 2025. Here’s what we know so far.

Microsoft Layoffs in 2025 Explained

Over 15,000 Employees Let Go Since May

According to internal reports, Microsoft has laid off more than 15,000 employees since May. The most significant wave occurred in July, cutting about 9,000 positions, followed by another 6,000 in May. The layoffs have continued across June, August, and most recently two months ago, when 40 more staff were let go.

The job cuts primarily affected teams in Azure cloud operations, global sales, and engineering. This marks five consecutive months of workforce reductions, signaling a broader restructuring within the company.

Microsoft Responds to the Layoffs

A Microsoft spokesperson addressed the layoffs, saying:

“Organizational and workforce changes are a necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners.”

AI Investments Behind the Restructuring

Despite reporting $76.4 billion in revenue and $27.2 billion in profit this quarter, the company appears to be reallocating resources. Reports suggest that Microsoft plans to invest around $80 million into artificial intelligence initiatives, which could explain some of the restructuring.

According to analysts, the company’s focus on AI is reshaping its workforce priorities, leading to job cuts in traditional divisions while expanding in new research areas. These changes align with Microsoft’s ongoing strategy to integrate AI into both enterprise and consumer products.

Activision Deal and Cost Pressures

Former FTC Chair Lina Khan commented on X that Microsoft’s acquisition of Activision Blizzard contributed to increased internal costs, impacting both pricing and staff reductions. She suggested that these large-scale mergers often lead to operational cuts to balance expenses.

Earlier this year, the company also faced rumors regarding a potential Valve acquisition. The speculation gained traction online after a series of reports, but Microsoft later clarified that it was not planning to buy Valve. At the time, the company immediately refuted those claims, as detailed in our coverage of the Steam acquisition rumor, emphasizing that it remains focused on responsible AI and gaming investments.

Layoffs Spread Across the Tech Industry

Microsoft’s layoffs are part of a wider industry trend. Amazon, Meta, and Intel have also announced major staff reductions this year, with Intel reportedly cutting up to 25,000 jobs amid restructuring efforts.

The wave of layoffs reflects a challenging environment for the tech industry, even as companies continue to post strong earnings. Rising operational costs, increased AI spending, and post-acquisition adjustments are reshaping the workforce across Silicon Valley and beyond.

The Human Cost of Microsoft’s Transformation

While Microsoft continues to expand its AI and gaming portfolio, the ongoing layoffs highlight the cost of this transformation. The company’s financial stability remains strong, but the pressure to innovate quickly in AI and maintain competitive advantage is driving difficult decisions internally.