MICROSOFT CUTS THOUSANDS OF JOBS WHILE BOLSTERING AI INVESTMENTS

Microsoft is trimming its global workforce by about 6,000 jobs, roughly 3% of its 228,000 employees, while pouring significant resources into artificial intelligence, as announced this week.

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The layoffs, affecting various teams and levels worldwide, mark the company’s largest workforce reduction since slashing 10,000 roles in 2023. For employees, investors, and the tech industry, the move highlights Microsoft's strategic pivot toward Al-driven growth, balancing cost-cutting with investments in cutting-edge technology to stay competitive in a $2 trillion market.

The cuts, not tied to performance but to a focus on high-priority areas like Al, aim to streamline operations, with CEO Satya Nadella emphasizing smarter resource allocation after slower-than-expected Azure cloud growth outside Al.

Meanwhile, Microsoft's $80 billion Al spending this fiscal year, with over half in the U.S., underscores its commitment to leading the global Al race, as outlined in recent executive statements.

The layoffs, paired with this aggressive Al push, reflect broader tech industry trends where companies like Meta and Amazon are also slashing jobs to fund Al innovation, raising questions about workforce impacts in a rapidly evolving sector.

LAYOFF DETAILS AND SCOPE

Microsoft plans to eliminate approximately 6,000 positions, representing less than 3% of its 228,000-strong workforce as of June 2024, across different levels, teams, and regions.

The reductions target middle managers while prioritizing coders over non-technical roles, aligning with the company's focus on technical expertise for AI development. Affected employees will receive at least 12 weeks of pay, with no performance-based criteria driving the cuts, as confirmed by a company spokesperson.