Tech giant Microsoft has announced another round of job cuts affecting approximately 9,000 employees worldwide, or just under 4% of its global workforce. The decision was revealed on Wednesday (2 July) and marks yet another significant restructuring effort as the company enters its 2026 fiscal year.
These layoffs span across different teams, regions, and levels of experience, with sources indicating the primary goal is to flatten organisational structures by reducing middle management. This move is designed to enable faster communication between frontline employees and top executives, increasing both business agility and operational efficiency—key high-CPM keywords in the technology sector.
Layoffs Coincide With Microsoft’s Financial Strength
The announcement came on the second day of Microsoft’s new fiscal year, a period when the Redmond-based corporation typically outlines internal restructuring plans. In an email statement, a Microsoft spokesperson said: “We continue to make organisational adjustments necessary to ensure the company and our teams are best positioned for long-term success in a rapidly evolving market.”
Despite the layoffs, Microsoft remains in a robust financial position. In the March 2025 quarter, it reported a net income of nearly US$26 billion (about S$35 billion) and revenue of US$70 billion (about S$94.6 billion)—well above Wall Street expectations. Executives have projected a year-on-year revenue increase of approximately 14% for the June quarter, driven largely by strong performance in Azure cloud services and enterprise software subscriptions.
Gaming Division Hit, But Tech Giant Remains Strong
The recent layoffs mirror those in May, when over 6,000 roles were eliminated, followed by at least 300 more in June. These job cuts are not Microsoft’s largest in history; the 2014 downsizing after acquiring Nokia’s device division remains its biggest, eliminating 18,000 jobs. However, this latest wave represents a significant adjustment at a time when the company’s gaming division is also seeing changes.
In a memo sent on Wednesday, Phil Spencer, CEO of Microsoft Gaming, told staff that the company plans to “focus on strategic growth areas” and will cut or scale down certain business lines to improve organisational agility. The memo stressed the importance of aligning with Microsoft’s broader aim of streamlining management layers to boost execution.
Layoffs Part of Industry-Wide Trend
This year, other tech companies have also resorted to mass layoffs as part of cost-cutting strategies, including Autodesk, Chegg, and CrowdStrike. Payroll services giant ADP reported that the US private sector unexpectedly lost 33,000 jobs in June, despite economists predicting an increase of 100,000.
Meanwhile, Microsoft’s shares closed at a record high of US$497.45 on 26 June, though they dipped slightly by 0.2% on Wednesday while the S&P 500 index gained 0.5%. This performance underscores Microsoft’s continued position as one of the most profitable firms on the S&P 500, even amid ongoing workforce reductions.
These developments highlight the paradox of a booming technology industry paired with persistent employment uncertainty, as companies prioritise efficiency to remain competitive in the face of rapid innovation and shifting market dynamics.