Two major US tech companies announce mass layoffs amid Artificial Intelligence boom. Check details
Recently, Bloomberg reported that after cutting 6,000 employees in May, tech giant Microsoft Corporation plans to layoff 'thousands' more jobs next month, particularly in sales. This comes as the company looks to 'trim its workforce' amid increased spending on artificial intelligence (AI), it added. The layoffs are expected to be across teams, with major hits likely among sales employees, sources told Bloomberg.
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Microsoft layoffs in 2025
Microsoft is reportedly going to sack employees in its Xbox division next week, reports Bloomberg as part of a broader company-wide reorganisation. This is the fourth major layoff for Xbox in the past 18 months, following three significant reductions last year and the closure of several subsidiary studios.
Xbox, which develops video-game hardware and software, has faced pressure from Microsoft executives to improve profit margins since the $69 billion acquisition of Activision Blizzard Inc, finalised in 2023. The tech giant often implements major organisational changes at the end of its fiscal year, which concludes on 30 June.
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Earlier this year, Microsoft laid off more than 300 employees as a part of its cost-cutting measures. "We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,' a Microsoft spokesperson said, according to Bloomberg.
In May, Microsoft reduced its workforce by 3%, affecting around 6,000 employees across all levels, teams and geographies. This was the company's largest round of layoffs since it eliminated 10,000 roles in 2023. In January, Microsoft terminated a small number of employees, citing performance-based issues.
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Microsoft's layoffs coincide with its significant investments in artificial intelligence with the company recently announcing a $400 million investment in Switzerland to develop cloud-computing and AI infrastructure. In January, Microsoft committed $3 billion to develop AI infrastructure, including new data centres in India in the next two years.
'The investments in infrastructure and skilling we are announcing today reaffirm our commitment to making India AI-first,' Microsoft chairman and CEO Satya Nadella said earlier.
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Amazon layoffs in 2025
Earlier this month, Amazon CEO told employees that job cuts in the tech giant would continue as AI will reduce the company's corporate workforce over the next few years. "We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs," Jassy wrote in an internal memo. "It's hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company."
The company has already laid off more than 27,000 employees since 2022, including recent cuts to its devices and services units. These layoffs reflect a broader trend in the global tech industry. In early May, Google laid off around 200 employees, primarily in its global business unit in teams handling sales and partnerships. Similarly, Amazon reduced approximately 100 jobs in its devices and services unit in another round.
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