Microsoft cuts thousands of jobs in latest layoff wave amid major AI push & exec shake-up; CCO goes on sabbatical

Time of India

02-07-2025

Microsoft has initiated another large-scale workforce reduction, confirming it will lay off more than 9,000 employees globally. This move, which affects nearly 4% of its 228,000-strong global workforce, marks the third major round of job cuts by the company in 2025. The layoffs are part of Microsoft's continuing effort to restructure operations and shift its focus toward artificial intelligence-driven growth.
AI push drives organisational changes
In an official statement, a Microsoft spokesperson said, 'We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace.' The company highlighted that even under favourable market conditions, regular adjustments in staffing have been part of its business strategy. Microsoft has stated that it aims to empower employees by leveraging new technologies that allow them to focus on more meaningful work, indicating a broader integration of AI across all its services and departments.
The latest layoff round follows cuts made earlier this year. In May 2025, Microsoft reduced its workforce by about 6,000 employees, followed by another smaller round weeks later. The current layoffs are expected to primarily affect the sales and marketing departments, although no specific regions were mentioned.
Judson Althoff on sabbatical amid changes
In a related development, Microsoft's Chief Commercial Officer, Judson Althoff, has taken an eight-week sabbatical. The leave, as confirmed by the company, was pre-scheduled and aligns with the end of Microsoft's fiscal year, which closed on June 30, 2025. Althoff is expected to resume his duties in September.
Sorry to hear about the layoffs at over at Microsoft Like the mass layoffs, studios closures and Game Cancellations at PlayStation , Embracer & others these are never good nor should be celebrated or used for Console war.Hopefully everyone lands on their feet soon. pic.twitter.com/8SVBCUuVrS
The timing of the sabbatical has drawn attention within the industry, as it coincides with the period of significant internal restructuring. While Microsoft has not indicated any link between Althoff's absence and the workforce changes, the overlap has prompted speculation among analysts and insiders.
More layoffs may follow in Xbox division
According to an earlier Bloomberg report, Microsoft may also be preparing additional layoffs in its gaming division, particularly within Xbox. If implemented, this would mark the fourth major layoff round at Microsoft in just 18 months, underscoring the scale of internal changes taking place.
Meanwhile, the news of potential job cuts had an immediate, albeit minor, effect on Microsoft's stock performance. On Wednesday, Microsoft's intraday share price slipped by 0.68%, from $493.50 to $490.37. As of 11:00 a.m. EDT, shares were trading at $491.74, slightly down from the previous day's close of $492.05, according to MarketWatch data.