Microsoft is reportedly preparing to cut several thousand jobs, with a large number of those cuts expected to affect employees working in sales. According to a report by Bloomberg, the layoffs are expected to be announced in early July, shortly after the company’s fiscal year ends. While most of the cuts will affect sales roles, other departments across the company may also be impacted.
The move is part of a larger effort by the software giant to reorganize its business and adapt to changing priorities. The Redmond-headquartered company is trying to become more efficient by reducing roles that may no longer be as essential, especially as it shifts more focus and investment toward artificial intelligence. By cutting jobs in certain areas, Microsoft hopes to free up money and resources to support its growing AI infrastructure.
These upcoming layoffs follow earlier rounds of job cuts that already affected thousands of workers. In May 2025, the company eliminated about 6,000 positions (around 3% of its global workforce) as part of a company‑wide restructuring that targeted management layers and engineering roles.
Additionally, in June 2025, the tech titan reportedly removed over 300 more positions as the company continued trimming costs amid escalating investments in AI. Now, with the latest planned layoffs expected in July 2025, this would mark the fourth round of job cuts at Microsoft so far this year. Earlier, in January 2024, Microsoft cut 1,900 jobs across its Xbox, Bethesda, and Activision Blizzard divisions. That decision came shortly after the company finalized its acquisition of Activision Blizzard. Also in 2023, the firm removed people from its HoloLens augmented reality unit and other engineering teams.
Meanwhile, the latest development comes at a time when the company’s capital expenditures jumped by 53% to $21.4 billion in the third quarter of fiscal year 2025, which ended on March 31. At the same time, the tech giant has set a goal of investing around $80 billion in AI-related infrastructure during fiscal year 2025, which is a big increase compared to previous years. This investment includes major spending on data centers, servers, and computing power to support the growing demand for AI tools and services.
However, despite putting all such efforts in the AI domain (even including major job cuts), Microsoft is continuously facing challenges on multiple fronts. More recently, tensions have reportedly grown with its key AI partner, OpenAI, which is said to be considering antitrust action amid a dispute over for-profit transition and revenue sharing. At the same time, Microsoft has joined other major tech companies in lobbying to block individual US states from introducing their own AI regulations.
