Microsoft on Tuesday said that it’s laying off 3% of employees across all levels, teams, and geographies, affecting about 6,000 people.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement to CNBC.
The company reported better-than-expected results, with $25.8 billion in quarterly net income, and an upbeat forecast in late April.
Microsoft had 228,000 employees worldwide at the end of June. On Tuesday, Washington state said the company was reducing headcount tied to its Redmond headquarters by 1,985 people, including 1,510 in-office roles.
In total, this is likely Microsoft’s largest round of layoffs since the elimination of 10,000 roles in 2023. In January, the company announced a small round of performance-based layoffs.
In April, Microsoft reported a strong quarter with $70.1billion in revenue up13%, surpassing analyst expectations.
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” said Satya Nadella, chairman and chief executive officer of Microsoft, said last month. “From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.”
“We delivered a strong quarter with Microsoft Cloud revenue of $42.4 billion, up 20% (up 22% in constant currency) year-over-year driven by continued demand for our differentiated offerings,” said Amy Hood, executive vice president and chief financial officer of Microsoft.
Revenue in Productivity and Business Processes was $29.9 billion and increased 10% (up 13% in constant currency), with the following business highlights:
- Microsoft 365 Commercial products and cloud services revenue increased 11% (up 14% in constant currency) driven by Microsoft 365 Commercial cloud revenue growth of 12% (up 15% in constant currency)
- Microsoft 365 Consumer products and cloud services revenue increased 10% (up 12% in constant currency) driven by Microsoft 365 Consumer cloud revenue growth of 10% (up 12% in constant currency)
- LinkedIn revenue increased 7% (up 8% in constant currency)
- Dynamics products and cloud services revenue increased 11% (up 13% in constant currency) driven by Dynamics 365 revenue growth of 16% (up 18% in constant currency)
Revenue in Intelligent Cloud was $26.8 billion and increased 21% (up 22% in constant currency), with the following business highlights:
- Server products and cloud services revenue increased 22% (up 24% in constant currency) driven by Azure and other cloud services revenue growth of 33% (up 35% in constant currency)
Revenue in More Personal Computing was $13.4 billion and increased 6% (up 7% in constant currency), with the following business highlights:
- Windows OEM and Devices revenue increased 3%
- Xbox content and services revenue increased 8% (up 9% in constant currency)
- Search and news advertising revenue excluding traffic acquisition costs increased 21% (up 23% in constant currency)
Microsoft returned $9.7 billion to shareholders in the form of dividends and share repurchases in the third quarter of fiscal year 2025.
Despite solid financials, this new round of retrenchments is expected to impact all levels, locations, and teams. The company also had layoffs earlier this year, which it described as performance-based.
Thousands of workers have been laid off from Big Tech companies in the past year, including Amazon and Meta, which also conducted job cuts in January.
