Microsoft has announced that it will lay off 3% of its global workforce. This decision, affecting more than 7,000 employees, comes shortly after the company reported a $25.8 billion profit for fiscal year 2024. According to CNBC, Microsoft stated that the layoffs were necessary to position the company for success in a dynamic market.
Although the exact number of positions being cut was not revealed, Microsoft confirmed that the layoffs would affect all levels, teams, and locations. As of June 2024, Microsoft had around 228,000 employees, and the calculations made by CNBC are based on this number.
Layoffs at Microsoft
This is not the first time Microsoft has made significant layoffs. In January 2023, the company cut 10,000 positions across various divisions. Earlier this year, Microsoft also made layoffs, citing employee performance as the reason. However, the current round of layoffs is different, as it is not based on performance but rather restructuring efforts.
In a statement to CNBC, Microsoft explained that a large portion of the layoffs would target its bureaucratic layers. The company aims to reduce some of its managerial levels, which will help make its internal operations more agile.
Microsoft also plans to reevaluate its Azure business, which generated lower-than-expected revenue in the last fiscal quarter. At the same time, the company will continue to increase its investments in artificial intelligence, an area that has exceeded expectations.
CEO Satya Nadella had already anticipated a decline in Azure’s performance due to changes in sales processes. However, he assured shareholders that the company was preparing changes to ensure that it would no longer engage in activities that were no longer as effective as before.
