Microsoft, which is one of the world’s largest software companies, is preparing for its third significant round of layoffs in 2025. This move comes after the tech giant continues a sweeping internal restructuring. This is their third round of layoffs in 2025. With that company seeks to streamline its operations amid this rapidly changing economy and evolving technological demands.
Targeted Departments of the 2025 Layoffs
According to reports, the company plans to lay off more than 1,000 employees, who are expected to lose their jobs by the end of July. On the other hand, some reports also suggest this may have happened at the end of this month, which is in June. This decision will primarily target positions across several divisions, which include cloud computing, artificial intelligence, and hardware development.
Reports also anticipate that the layoff will target roles within Microsoft’s sales, marketing, and software engineering teams. These divisions or departments employ 45,000 people on a global level.
Layoffs Driven by AI Investment and Restructuring
According to the sources, this reduction is closely linked to Microsoft’s aggressive push into the world of Artificial Intelligence. The company has aimed to invest $80 billion during this fiscal year to expand its Artificial Intelligence Infrastructure. Much of this amount will go to invest directly in building a new data centre. CEO of Microsoft, Satya Nadella, describes the previous layoff as a “realignment”, rather than performance-based decisions. He also said, “This was about people failing. It was about repositioning for what comes next”.
Financial and Industry Impact of Layoffs
Analysts estimate that the July layoffs could save Microsoft up to $15 billion in total and $1.65 billion annually. The company has approached mirrors a wider Silicon Valley trend with over 83,000 tech jobs cut industry-wide since the start of 2025. Microsoft is considering a restructuring strategy inspired by the ‘Builder Ratio’ model, which Amazon promoted. They are now prioritising technical talent over the middle management and organisational hierarchies.
Employee Support Over The Decisions
All of the affected employees will going to be receive 12 weeks of base pay and also two additional weeks for each year of service. Still, the company has not publicly confirmed how many roles it will cut or made any official comments. The company has previously eliminated 10,000 employees from their positions. In May 2025, the company had already laid off 6,000 people.
The company also made significant cuts in its gaming division after acquiring Activision Blizzard. These are the people who are working in the engineering department. This was the time of 2023 after pandemic-driven hiring. Even now, they have declined to comment on these planned layoffs. As Microsoft doubles down on AI and cloud infrastructure, these layoffs underscore the company’s determination to remain at the forefront of technological innovation.
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