Microsoft Cuts 9,000 Jobs In Second 2025 Layoff As AI Expansion Pushes Cost Controls

Microsoft Corp‘s MSFT latest round of downsizing will affect less than 4% of its workforce, or 9,000 workers.

This marks Microsoft’s second layoff for 2025, Bloomberg reported on Wednesday, citing a company spokesperson. The company cited cost control affecting diverse teams, geographies, and tenures.

Prior reports indicated that Microsoft planned to downsize by thousands in July, affecting salespeople and divisions, including Xbox.

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Candy Crush parent King division slashed 10% of its staff, or about 200 jobs, Bloomberg reported on Wednesday, citing unnamed sources familiar with the matter. Microsoft’s other European offices, like ZeniMax, also began informing employees about layoffs.

Microsoft will soon inform its U.S. units about their respective downsizing.

Microsoft’s gaming division had about 20,000 employees as of January 2024.

Microsoft slashed 6,000 jobs in May, mainly affecting product and engineering positions.

The company had 228,000 workers at the end of June 2024, including 45,000 in sales and marketing.

In April 2025, Microsoft shut down its China joint venture, Wicresoft, cutting 2,000 jobs as part of ongoing efforts to streamline operations. Throughout 2024, the company steadily reduced its workforce by thousands. Earlier, in early 2023, Microsoft laid off 10,000 employees—around 4%- 5% of its staff—citing slower growth after the pandemic and the need to adapt to shifting economic conditions.

Microsoft remained firmly on track to spend about $80 billion building AI data centers this fiscal year. 

In April, Microsoft reported third-quarter revenue of $70.07 billion, up 13% year-over-year. The revenue total beat a Street consensus estimate of $68.43 billion.

Total Microsoft Cloud revenue was $42.4 billion in the quarter, up 20% Y/Y. Azure and other cloud services revenue was up 33% Y/Y. In the More Personal Computing segment, Xbox content and revenue were up 8% Y/Y, with Search and news advertising revenue up 21% Y/Y.

The quarterly net income of $25.8 billion increased 18% Y/Y. The margin expanded by 139 bps to 36.9%.

Bloomberg expects generative AI spending to reach $1.8 trillion or 14%-16% of all technology spending by 2032, pressurizing hyperscalers like Microsoft and its Big Tech peers to generate return on assets for capital spending.

Economist Craig Shapiro warned against a looming crisis as tech giants like Amazon.com AMZN and Microsoft pour billions into AI, which Goldman Sachs projects could automate 25% of U.S. jobs by 2030.

MSFT Price Action: MSFT stock was trading higher by 0.04% to $492.30 at last check on Wednesday.

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