From Gaming Studios to Senior Managers, Microsoft Cuts 9000 More Jobs…
In what is the company’s second downsizing in 2025, Microsoft has laid off around 9000 employees which is nearly 4% of their global task force. The downsizing has been across various sectors, including sales, marketing, Xbox gaming and engineering and this shows the company’s aggressive tilt towards artificial intelligence and cloud infrastructure.
While the approach might be keeping the future in mind, it has nevertheless caused frustration and concern among employees who feel that talent is being sacrificed at the altar of efficiency.
Strategic AI Shift & Cost Rationalization
Microsoft has spent in excess of US$ 80 billion on data centres for training models like Copilot and its OpenAI alliances so their investment into AI is quite clear. But to fund this, the company has had to reduce their wage bill and for this it has removed many of its management levels. They claim this is necessary for operational agility and cost control.
Many company leaders – including CEO Satya Nadella – has insisted that the jobs cuts are not a result of poor performances but is part of Microsoft’s realignment towards its strategic future in cloud and AI.
But many critics are not buying it. Especially the job cuts in engineering and sales. They say AI has been used as a scapegoat to cover the deeper industrial shift that is underway.
Widespread Impact Across Divisions
The job cuts have been across divisions. Nearly 2000 people from the Xbox gaming team have been laid off. This includes teams at King (Candy Crush), Raven Software, ZeniMax, Turn 10 Studios, Halo Studios and others. Projects like Everwild and Perfect Dark have been completely scrapped.
Apart from that, traditional roles in sales and marketing have been replaced with more technical “solutions engineers” who are more equipped to support AI deliverables. And also, many middle management roles have been cut to streamline decision making across various business units.
Microsoft stated that the affected employees would receive severance and job-placement support.
“Good People Are Going”
When we look beyond the statistics, it is disheartening to hear from the employees who have been laid off as well as their colleagues who now have to continue without them, in the fear that they could be next.
Amanda Goodall, the CEO of EdgePulse, who is better known online as @thejobchick, has been sharing firsthand accounts of the situation.
One employee mentioned how she was fired on a group call. She also added that “many of my peers got similar calls and entire teams were fired in bulk… on group calls.”
Another employee added: “I’m very sad at the talent we’re letting walk out the door, including the best manager I’ve ever had in my life. I think it’s the end of the old Microsoft culture that has kept me here for more than a decade. Not liking the Amazon-style cutthroat ways we’re taking on, and I don’t care if I get fired for saying so.”
These testimonies reveal a sense of cultural shift at the company from ‘the old Microsoft culture’ to a more cutthroat mindset.
Tech Industry’s AI-Driven Rationalization
Microsoft are not the only ones with massive layoffs in tech this year. In 2025 alone, 61,000 jobs have been cut across Google, Amazon, Meta and CrowdStrike. AI adoption is triggering workforce restructuring across the board and this is being seen as a transformative phase in the tech industry. Around 41% of companies expect job losses connected to AI integration.
Microsoft’s strategy of investing in AI while downsizing clear reflects their new philosophy of extreme capital deployment with lean staffing to preserve margins. This has gone down well with investors as they favour efficiency and future readiness over short term pain. And as a result of this, their stock price has remained intact.
The Last Word
The latest layoffs clearly reveal a change in strategy. Beloved managers and experienced engineers have been laid off to facilitate AI and efficiency. Thus, marking the end of a collaborative culture that the company once championed.
But looking into the future, this will all be forgotten as the company has stayed future ready and taken a hard call now so that their stock and value will not be impacted in an AI-driven future.
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