Tech giant Microsoft has now brought forth yet another round of job cuts, impacting over 300 employees in early June. This latest reduction follows a larger workforce reduction last month, which saw approximately 6,000 positions eliminated globally. A company spokesperson confirmed these actions are part of ongoing “organizational changes necessary to best position the company for success in a dynamic marketplace.” These recent reductions mark the third round of layoffs for Microsoft in 2025, with previous workforce adjustments also occurring in January.
The precise roles affected in this most recent round of layoffs were not specified, though a Washington state notice confirmed the eliminations. Earlier job cuts, particularly those announced in May, were reported to have a notable impact on software engineering roles. Recently, Microsoft CEO Satya Nadella addressed the workforce shifts, explaining during a company-wide town hall that the company is to streamlining its operations, and that the layoffs are a “realignment,” not the performances of the employees themselves.
This development comes at a time when the company’s capital expenditures surged by 53% to $21.4 billion in the third quarter of fiscal year 2025, which concluded on March 31. This investment is primarily allocated to scaling AI data centers and securing GPU supply. Chief Financial Officer Amy Hood has stated that while capital spending is projected to continue growing in fiscal year 2026, commencing in July, it is expected to do so at a more moderate rate than in the current fiscal year. Microsoft has previously affirmed a target of approximately $80 billion in AI-focused capital expenditures for fiscal year 2025, marking a major increase from prior years.
These internal workforce adjustments are taking place as the broader techindustry, including Microsoft, continues to direct substantial capital towards AI development. The rapid emergence of AI has begun to reshape the tech labor market, and companies are increasingly prioritizing positions focused on AI development and implementation, while simultaneously leveraging AI to enhance operational efficiency and reduce costs. For instance, both Microsoft and Meta Platforms have highlighted the effectiveness of AI-assisted coding tools in accelerating software development cycles. Similarly, Salesforce Inc. recently noted that its internal adoption of AI tools has allowed for a reduction in hiring needs. AI tools have advanced to a point where they can automate parts of software development, with Microsoft’s CEO previously indicating AI’s capability to generate up to 30% of code in some projects.
As of June 2024, Microsoft maintained a global workforce of approximately 228,000 full-time employees, with 55% of these positions located in the United States. The total number of job eliminations in Washington state alone has reached nearly 2,300 in recent weeks. Across the broader tech sector, data from layoff tracking platforms indicates that over 61,220 professionals have been affected by job reductions across 130 companies in 2025 to date.
