Microsoft Layoffs 2025: 9,000 Jobs Cut Across Multiple Teams and Locations — Here’s Who’s Affected

What Happened?

Microsoft launched a major round of layoffs on July 2, 2025, cutting around 9,000 jobs—roughly 4% of its global workforce of ~228,000 (AP News, Procurement Magazine). This action marks the largest single layoff since late 2023.

📉 Who Did Microsoft Lay Off?

Widespread Impact Across Departments

• Microsoft trimmed roles across sales, Xbox gaming, engineering, and more (Procurement Magazine, AP News).
• The company eliminated 830 jobs at its Redmond, Washington headquarters (AP News).

Gaming Division Took a Heavy Hit

• Microsoft cut 2,000 roles in the gaming unit.
• Studios like Xbox Game Studios, Rare, ZeniMax, King, Raven Software, Turn 10, and Halo Studios faced reductions (WIRED).
• The company also canceled games such as Perfect Dark, Everwild, and a planned MMORPG (WIRED).

Sales Team Restructuring

• Microsoft prioritized AI-driven operations and reduced traditional sales positions (Salesforce Ben).

🎯 Why Did This Happen?

AI and Cost Efficiency Strategy

• Microsoft aligned the layoffs with its $80 billion investment in AI, data centers, and cloud infrastructure (Redmond Channel Partner).
• Executives projected savings of over $500 million through AI automation in sales and service (Redmond Channel Partner).

Management Streamlining

• Microsoft eliminated middle management layers to speed up decision-making and increase organizational agility (AP News).

📆 Previous Layoffs in 2025

Microsoft had already laid off thousands earlier this year:

• May: Cut around 6,000 jobs in engineering, product, and LinkedIn divisions (Redmond Channel Partner).
• June: Reduced staff by approximately 300 more in Redmond (AP News).

The 2025 total has now reached about 15,000 roles.

📣 What Did Microsoft Say?

• Satya Nadella (CEO) urged the company to build “high-performing teams” and integrate AI into daily operations (WOWT).
• Phil Spencer (Xbox head) noted that the layoffs aim to simplify management and focus on thriving sectors. The company offers severance packages and job placement services (WIRED).
• Microsoft encourages remaining staff to upgrade their skills through Microsoft Elevate and other AI programs (Redmond Channel Partner).

🙏 How Did People React?

• Chris Bynum, a 25-year veteran, shared a heartfelt message on LinkedIn, describing the news as “bitter-sweet” (The Times of India).
• On Reddit, reactions varied. Some criticized the company’s suggestion to use Copilot for emotional support. Others found AI tools helpful for updating résumés and job searching (Reddit).

🔍 Final Takeaway

Microsoft’s 9,000-job layoff reflects a major shift toward:

• Embracing AI-first technology.
• Removing layers to drive leaner operations.
• Channeling resources into fast-growth, high-impact areas.

Still, the downsizing deeply affected the gaming and sales sectors. Microsoft aims to soften the impact with re-skilling programs and career transition help.