Microsoft lays off 4 per cent of global workforce, impacting thousands of jobs

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6 hours ago

Your web browser is no longer supported. To improve your experience update it here Microsoft says it is laying off about 9000 workers, its second mass layoff in months and its largest in more than two years. The tech giant began sending out layoff notices today that hit the company's Xbox video game business and other divisions. Among those losing their jobs are 830 workers tied to Microsoft's US headquarters in Redmond, Washington, according to a notice sent to state officials. Microsoft says it is laying off about 9000 workers, its second mass layoff in months and its largest in more than two years. (Getty) 9news.com.au contacted Microsoft Australia to ask how many Australian workers the lay-offs would impact. It was unable to provide a number but issued a statement saying the company would continue to "implement organisational changes necessary to best position the company for success in a dynamic marketplace". Microsoft said the cuts will affect multiple teams around the world, including its sales division, part of the "organisational changes". The company won't say the total number of layoffs except that it was about 4 per cent of the workforce it had a year ago. A memo to gaming division employees today from Xbox CEO Phil Spencer said the cuts would position the video game business "for enduring success and allow us to focus on strategic growth areas". Xbox would "follow Microsoft's lead in removing layers of management to increase agility and effectiveness," Spencer wrote. Microsoft employed 228,000 full-time workers as of June 2024, the last time it reported its annual headcount. Its latest layoffs would cut fewer than 4 per cent of that workforce, according to Microsoft. The tech giant began sending out layoff notices that hit the company's Xbox video game business and other divisions. (Getty) But it has already had at least three layoffs this year and it's unlikely that new hiring has matched the amount lost. Either way, a 4 per cent cut would amount to somewhere in the range of 9000 people. Until now, this year's biggest layoff was in May, when Microsoft began laying off about 6000 workers, nearly 3 per cent of its global workforce and its largest job cuts in more than two years. The cutbacks come as Microsoft continues to invest huge amounts of money in the data centres, specialised computer chips and other infrastructure needed to advance its AI ambitions. The company anticipated those expenses would cost it about $US80 billion ($121 billion) in the last fiscal year. Its new fiscal year began on Tuesday. Microsoft just last month cut another 300 workers based out of its Redmond headquarters, on top of nearly 2000 who lost their jobs in the Puget Sound region in May, most of them in software engineering and product management roles, according to information it sent to Washington state employment officials. Microsoft says it is laying off about 9000 workers, its second mass layoff in months. (Getty) Microsoft's chief financial officer Amy Hood said on an April earnings call that the company was focused on "building high-performing teams and increasing our agility by reducing layers with fewer managers". The company has repeatedly characterised its recent layoffs as part of a push to trim management layers, but the May focus on cutting software engineering jobs has fueled worries about how the company's own AI code-writing products could reduce the number of people needed for programming work. Microsoft CEO Satya Nadella said earlier this year that "maybe 20, 30 per cent of the code" for some of Microsoft's coding projects "are probably all written by software". The latest layoffs, however, seemed centred on slower-growing areas of the company's business, said Wedbush Securities analyst Dan Ives. "They're focused more and more on AI, cloud and next-generation Microsoft and really looking to cut costs around Xbox and some of the more legacy areas," Ives said. "I think they overhired over the years. This is Nadella and team making sure that they're keeping with efficiency and that's the name of the game in Wall Street." The trimming of the Xbox staff follows Microsoft's years-long expansion of the business surrounding its gaming console, culminating in 2023 with the $US75.4 billion acquisition of Activision Blizzard — the California-based maker of hit franchises like Call of Duty and Candy Crush. Before that, in a bid to compete with Sony's PlayStation, it spent $US7.5 billion to acquire ZeniMax Media, the parent company of Maryland-based video game publisher Bethesda Softworks. Many of those game studios, which have locations across North America and Europe, were struggling with the layoffs, according to social media posts from employees who announced they were looking for new jobs. World
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