Latest Round of Microsoft Layoffs Affects About 6,000 Workers
While increasing investments in AI, Microsoft is also reducing its workforce.
Microsoft is laying off around 6,000 workers. According to the company, the job reductions will affect employees at every level and will eliminate various layers of management.
Microsoft said the structural changes are necessary as it navigates a “dynamic marketplace.” The latest round of layoffs, which represents less than 3% of the tech giant’s total workforce, will be the largest since the company laid off 10,000 employees two years ago.
The job reduction announcement comes just a few weeks after the company released better-than-expected quarterly earnings, particularly through the growth of its cloud business, Azure. However, heavy investment in AI has eroded its profit margins.
Gil Luria, an analyst with D.A. Davidson, told Reuters that job reductions typically happen when profit is squeezed from increased investments. The analyst even hinted at more layoffs.
“We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000 in order to make up for the higher depreciation levels due to their capital expenditures,” he said.
Ironically, even executives involved with AI support and development were not spared Microsoft’s layoffs. Gabriela de Queiroz, director of artificial intelligence for startups, was let go by the company.
