Microsoft lays off another 300 employees, weeks after its largest job cut in years

Microsoft had laid off more than 300 employees as part of its continued efforts to reduce operational costs and strengthen investment in artificial intelligence. The latest development comes weeks after the tech company laid off 6,840 employees globally, representing its largest job cuts in years. 

According to a notice from Microsoft, over 300 employees were informed on Monday that their services are no longer required. It noted that the reduction aligns with its plans to implement organisational changes necessary to best position the company for success as the global marketplace evolves. 

In addition, analysts suggest that Microsoft’s restructuring is part of a broader industry response to economic uncertainties and technological advancements.

“Layoffs in 2025 are reshaping the workforce,” a Forbes report noted, pointing to downsizing across tech, retail, and logistics sectors, with companies like Meta, Amazon, and CrowdStrike also trimming staff.

The layoffs also follow a series of smaller workforce reductions at Microsoft over the past year, including 650 Xbox employees in September 2024, 1,000 from HoloLens and Azure teams in June 2024, and 2,000 performance-based cuts in January 2025. Then, the moves sparked concerns among employees about job security, particularly as the company tightens performance standards and shifts toward a higher engineer-to-manager ratio.

Also Read: Microsoft lays off 6,840 employees globally in largest job cuts since 2023.

The artificial intelligence boom also poses a threat to the tech labour market as companies continue to prioritise AI-focused jobs and reinforce the technology to save funds. Microsoft and others, including Meta Platforms Inc., have embraced the effectiveness of AI-assisted coding tools in speeding up the software development process. 

Last week, Salesforce Inc. said the internal use of AI has allowed it to hire fewer workers. The company joins Amazon and Google in implementing flatter organisational structures with higher engineering ratios.

Microsoft layoffs: Software engineers feeling the heat

While the AI boom continues to shape a new directive across various tech companies, Microsoft’s recently announced job cuts fell hardest on Software engineers who build the company’s products. This presents a shocking revelation that software developers are at risk in the age of artificial intelligence.

In a recent report, software engineers were the largest single job category to receive a job cut, with 40 per cent of 2,000 jobs receiving layoff notices. As in previous Microsoft layoffs, which fell hardest on software engineers, it couldn’t be determined what kind of jobs were affected on Monday. As of June 2024, the company had about 228,000 full-time employees, 55 per cent of whom were employed in the United States.

According to the company’s CEO, Satya Nadella, the layoffs coincide with Microsoft’s revelation that AI now writes up to 30 per cent of code in some company projects. The company has allocated approximately $80 billion for data centre spending this fiscal year as part of its AI infrastructure push.

While explaining the earlier job cuts, Satya said they are realignment moves rather than performance-based decisions. “This was not about people failing. It was about repositioning for what comes next,” Nadella explained while referring to the company’s AI transformation. 

Amid the current wave of layoffs, the tech company continues to bolster its AI waves. It announced on Monday that it is introducing the Bing Video Creator to its app, which uses OpenAI’s Sora model to let users generate videos from text prompts. As access to Sora’s video generation was previously restricted to paying customers, the integration in Bing makes it the first time that it will be made available for free.

On how it works, the company explained that all users, as long as they are logged into a Microsoft account, can use the Bing app to create 10 video clips at no cost. Then users have to pay 100 Microsoft Rewards points per video, and the points are awarded from searching with Bing or making purchases at the Microsoft Store.