Microsoft to axe 6000 jobs despite consistent profit streak

Microsoft has announced plans to lay off approximately 3% of its global workforce, equating to around 6,000 employees. The tech giant, based in Redmond, Washington, employed 228,000 full-time staff as of June last year. These cuts mark Microsoft’s largest reduction in workforce since early 2023, when it shed 10,000 jobs during an industry-wide scaling back of pandemic-era expansions.

The cuts will be spread across all levels and geographies but are primarily aimed at reducing management layers to improve efficiency and agility. In a statement issued by the company, Microsoft confirmed that notices were delivered earlier today, while expressing their intent to forge a streamlined organisational structure designed for success in a fast-changing market.

These layoffs arrive shortly after the company posted another strong financial quarter, surpassing Wall Street expectations for the fourth consecutive time. With a particular spotlight on their success in artificial intelligence, Microsoft continues to outperform in challenging economic conditions. Despite this success, the company’s Chief Financial Officer, Amy Hood, emphasised the need to focus on assembling high-performing teams and removing excess managerial layers during her recent earnings call.

Of the global workforce, the United States accounts for approximately 55% of Microsoft’s employees. Despite the notable reductions, the company’s headcount in March was still reported to be 2% higher than the same period last year. This reflects Microsoft’s broader intent to adjust its workforce composition in line with strategic priorities, rather than carry out reductions as a reaction to financial distress.

Performance-based adjustments have been underway at Microsoft since January, but these latest layoffs illustrate the company’s ongoing efforts to align operational efficiency with market dynamics. The continued reshaping of the business hints at the balancing act of maintaining financial success while navigating the evolving demands of the technology industry.