Microsoft has announced plans to lay off up to 9,000 workers as it shifts focus and ramps up investment in AI.
Microsoft has announced that it will lay off up to 9,000 employees in its latest round of job cuts, as the company accelerates its investment in artificial intelligence (AI). The layoffs represent about 4% of its global workforce of 228,000 people.
While the tech giant did not specify the departments affected, reports indicate that its Xbox gaming division could be among those hit. A spokesperson told reporters, “We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.”
This marks Microsoft’s fourth wave of job cuts in 2025. In May, it announced 6,000 layoffs, and official data from Washington state shows that over 800 positions will be cut in Redmond and Bellevue, key hubs for the company.
As part of its AI strategy, Microsoft is investing $80 billion (£68.6 billion) in massive data centres to support model training and development. The company has made AI a central pillar of its future, hiring British AI pioneer Mustafa Suleyman last year to head its newly formed Microsoft AI division.
A senior Microsoft executive recently told reporters that artificial intelligence will “fundamentally define the next half-century,” reshaping human interaction and the workplace.
Microsoft also maintains a significant stake in OpenAI, the company behind ChatGPT, though reports suggest tensions have arisen in the partnership. Bloomberg noted that Microsoft’s AI assistant, Copilot, has struggled to gain traction among business users who prefer ChatGPT.
These layoffs come as the wider tech industry races to secure top AI talent. Meta has reportedly offered signing bonuses exceeding $100 million (£74.3 million) to attract leading experts, with CEO Mark Zuckerberg personally involved in recruitment efforts. OpenAI’s Sam Altman confirmed that several of his team members had received such offers.
Amazon CEO Andy Jassy also recently acknowledged that AI would eventually replace some roles within his company, reflecting the growing shift across the sector.
