Microsoft is reportedly planning to lay off thousands of employees, primarily in its sales division, as the company shifts focus toward artificial intelligence (AI) and expands its infrastructure to support growing AI demands, according to a Bloomberg News report published Wednesday.
The job cuts are expected to be announced early next month, following the end of Microsoft’s fiscal year. Sources familiar with the matter indicate that the layoffs are part of a broader organisational restructuring aimed at aligning the tech giant’s workforce with its aggressive AI strategy.
Layoffs Follow Earlier Round in May 2025
This will be Microsoft’s second major layoff wave this year. In May 2025, the company cut around 6,000 jobs, affecting various departments. The upcoming cuts are said to go beyond sales teams, though the sales force is expected to be the most significantly impacted. As of June 2024, Microsoft employed approximately 228,000 people globally.
AI Investment Drives Workforce Changes
Microsoft’s renewed workforce strategy aligns with its massive capital investment in AI infrastructure. The company plans to spend $80 billion this fiscal year, largely dedicated to expanding data centres and improving capacity for its AI-powered services. This investment is part of Microsoft’s mission to remain a global leader in generative AI, as enterprises across sectors adopt AI technologies to streamline operations and stay competitive.
Microsoft Declines to Comment
While the report was based on sources familiar with internal plans, Microsoft declined to comment on the reported layoffs. Bloomberg also noted that the timing and scale of the job cuts could still change, depending on internal developments and market conditions.
Industry-Wide Trend Toward AI-Driven Restructuring
Microsoft’s move mirrors a broader trend across the tech industry, where major firms are reshaping their workforces to prioritise AI development. On Tuesday, Amazon CEO Andy Jassy also acknowledged that the expansion of generative AI and autonomous agents would lead to a reduction in Amazon’s corporate workforce over the next few years.
The industry-wide shift underscores how AI innovation is redefining corporate structures, resource allocation, and workforce planning in tech giants worldwide.
What This Means for Microsoft’s Future
As Microsoft reallocates resources toward AI, analysts suggest the company is laying the groundwork for:
- Faster AI service delivery
- Scalable cloud infrastructure
- Increased enterprise adoption of AI tools
- Operational efficiency in sales and support functions
Despite workforce reductions, Microsoft continues to position itself at the forefront of AI innovation, competing with the likes of Google, Amazon, and Meta in the race to deliver enterprise-ready AI solutions.
Microsoft’s reported layoffs reflect a strategic shift as the company doubles down on AI infrastructure, tools, and services. With tens of billions invested in expanding AI capacity, these job cuts may be part of a longer-term effort to optimise talent, reduce redundancies, and future-proof the company in an increasingly AI-driven tech economy.
