Microsoft is planning to cut thousands of jobs as it ramps up spending on artificial intelligence, with sales teams among the hardest hit, according to people familiar with the matter.
Microsoft is planning to cut thousands of jobs as it ramps up spending on artificial intelligence, with sales teams among the hardest hit, according to people familiar with the matter.
Bloomberg reports that the company will announce the layoffs in early July, right after the end of the fiscal year. While the main focus of the cuts will be on sales, other departments could also be affected. Sources emphasize that the timing and scope are still subject to change.
This will be the second major wave of layoffs in recent months. In May, Microsoft cut about 6,000 jobs, mostly in product and technical areas. In June, 600 employees were laid off, mainly from LinkedIn. At that time, sales and marketing departments were largely unaffected.
Back in April, the company announced plans to outsource some of its sales functions, particularly in its work with small and medium-sized businesses. This outsourcing model allows for cost reduction, which is a priority for Microsoft amid record investments in servers, data centers, and AI infrastructure.
«The company regularly reviews its organizational structure to invest in growth,» Microsoft has repeatedly stated. However, in practice, this means cuts in areas that are not a priority in the context of the AI strategy.
As of June 2024, Microsoft had 228,000 employees, of which about 45,000 worked in sales and marketing. The company traditionally conducts restructuring at the end of each fiscal year, and the new cuts are likely to be part of that process.
Microsoft, like other tech giants, is sharply increasing spending on AI development, while changing approaches to hiring and cutting costs in «classic» business areas. Against the background of a general recession in the Big Tech labor market, such cuts are becoming more frequent and affecting even previously untouched areas, such as sales.
As a reminder, we also wrote about how Microsoft decided to finally leave the Russian market: its subsidiary, Microsoft Rus LLC, is preparing to file for its own bankruptcy with the Moscow Arbitration Court.
