Microsoft to cut 9,000 jobs; continues focus on AI

Microsoft has recently confirmed plans to lay off up to 9,000 employees—just under 4% of its global workforce—as the company shifts its focus further toward artificial intelligence and streamlines internal operations.

The job cuts, which span multiple departments and regions, mark the company's third major round of layoffs this year, according to reports by Reuters, CNBC, and The Verge. In May, Microsoft cut over 6,000 roles, followed by at least 300 more in June. As of June 2024, the company employed 228,000 people.

"We continue to implement organisational changes necessary to best position the company and teams for success in a dynamic marketplace," a Microsoft spokesperson said in an email, as per the CNBC report.

Gaming is one of the hardest-hit divisions. Microsoft is reportedly cancelling development of the Perfect Dark reboot and Everwild, and shutting down The Initiative, the studio behind Perfect Dark, according to The Verge. Staff at other game studios, including Turn 10 and ZeniMax Online Studios, have also been affected. ZeniMax director Matt Firor announced his departure on X, saying: "While I won't be working on the game anymore, I will be cheering you on and adding to the thousands of hours I've already spent in-game."

Phil Spencer, Microsoft's CEO of Gaming, said in a memo: "To position Gaming for enduring success... we will end or decrease work in certain areas of the business and follow Microsoft's lead in removing layers of management."

The layoffs come as Microsoft doubles down on AI investment, including $80 billion in new data centres. The company remains highly profitable, reporting $26 billion in net income on $70 billion in revenue last quarter, and expects continued growth through Azure cloud and AI services, states the reports.