Microsoft is preparing to cut thousands of jobs, with a particular focus on its global sales division, as part of a broader restructuring effort driven by its deepening investment in artificial intelligence, according to a report by Bloomberg News citing sources familiar with the matter.
The anticipated layoffs, expected to be formally announced in early July following the end of Microsoft’s fiscal year, are part of a company-wide realignment as the tech giant ramps up its AI capabilities. The move comes just weeks after a previous round of job cuts in May, which impacted roughly 6,000 employees.
While Microsoft has not officially confirmed the reports, the company is reportedly preparing to streamline operations to support its $80 billion capital expenditure plan for this fiscal year. The bulk of this investment is focused on expanding AI infrastructure, particularly the development of new data centres to ease capacity constraints and support the growing demand for generative AI services.
The upcoming cuts are not expected to be limited to sales roles, although that division is likely to bear the brunt. Sources have cautioned that the exact number of job losses and affected departments may still change before the formal announcement.
As of June 2024, Microsoft employed approximately 228,000 people worldwide. It is not yet clear how the restructuring will affect the company’s operations in Ireland, where it has a significant presence.
The move aligns with a broader trend across the tech industry as companies shift focus toward artificial intelligence. Amazon CEO Andy Jassy said earlier this week that the integration of generative AI and AI-powered agents is expected to reduce the company’s overall corporate headcount in the coming years.
Microsoft has positioned itself as a leader in enterprise AI, deepening its partnerships with firms like OpenAI and embedding AI features across its product suite—from Azure to Office. Executives have indicated that supporting this transformation requires reshaping both its infrastructure and workforce.
Industry analysts say the layoffs reflect a strategic pivot rather than signs of financial distress. “Microsoft is in a phase of reinvention,” said tech analyst Carla Mendes of VentureSignal. “To lead in AI, they’re reprioritising talent and resources—this inevitably means letting go of roles that don’t align with that future.”
While the layoffs underscore the disruptive impact of AI on traditional corporate structures, Microsoft remains one of the most profitable and influential players in the global tech sector.
