Microsoft layoffs: Announced to cut down 9,000 roles in July

Microsoft announced a substantial reduction of approximately 9,000 jobs in July 2025, marking its second major round of layoffs this year. This latest cut impacts under 4% of its global workforce and follows an earlier reduction of 6,000 roles in May.  Combined, these actions bring Microsoft’s total workforce reduction to over 15,000 employees in the first half of 2025.

The company is committing enormous capital to artificial intelligence, with an estimated USD 80 billion earmarked for fiscal year 2025 alone, primarily for building and upgrading data centres to support AI models. This massive investment pressures operating margins, making workforce reductions a way to reallocate funds from salaries to AI infrastructure. Microsoft CEO Satya Nadella has publicly noted that AI is already generating a significant portion of code for some internal projects, impacting the demand for traditional programming roles.

While Microsoft continues to report strong financial results, these layoffs also reflect a broader industry recalibration. Many tech companies rapidly expanded during the pandemic-driven digital boom. Now, they are adjusting their headcounts to align with a more normalized market and long-term strategic priorities.

Microsoft's large-scale layoffs are not isolated events but mirror similar actions taken by other major tech players in 2025. Companies like Intel, Amazon, and Meta have also pursued significant workforce reductions, driven by similar imperatives: investing heavily in AI, optimizing costs, and streamlining their organizational structures. This trend underscores a collective push across the industry towards leaner, more AI-centric operations.

For employees across the tech sector, these continuous announcements have a tangible impact. Morale often dips among remaining staff, leading to increased anxiety and a phenomenon known as "survivor's guilt." Many report higher workloads and a suppressed sense of job security.

The broader tech talent landscape is also shifting. While some traditional roles face pressure, new opportunities are emerging in specialized AI fields, such as AI governance, AI ethics, and agentic AI engineering. There is also a growing demand for cybersecurity experts and more adaptable, generalist engineers who can work across various technologies. The industry is seeing a notable migration of talent from established hubs to rising tech centres, and fractional work is becoming a more common engagement model for skilled professionals.