Microsoft to cut 9,000 jobs as AI investments reshape company structure

Microsoft is set to cut up to 9,000 jobs globally, affecting around 4% of its 228,000-strong workforce. The move will impact multiple divisions, with the Xbox gaming unit likely among them.

This marks the company's second round of layoffs this year, following 6,000 job cuts in May.

More than 800 affected roles are based in Redmond and Bellevue, Washington, according to a state database.

These layoffs come as Microsoft pours $80 billion into artificial intelligence infrastructure, building data centers to support AI model training.

Last year, the company brought on British AI pioneer Mustafa Suleyman to lead its newly formed Microsoft AI division, further signaling its long-term focus on artificial intelligence.

“Artificial intelligence will fundamentally transform the next five decades,” a senior Microsoft executive said, highlighting the company’s belief that AI will reshape work and human interaction.

Microsoft maintains a major investment in OpenAI, the developer of ChatGPT, though recent reports suggest some strain in their partnership.

The company is also grappling with slow adoption of its AI assistant Copilot among business users, many of whom prefer the more established ChatGPT.

This underscores the fierce competition in the AI sector, where firms are racing to attract top talent and assert dominance.

As tech companies accelerate AI development, traditional software and engineering roles are being reshaped or eliminated.

Meta has reportedly offered signing bonuses exceeding $100 million, while Amazon is reorganizing teams to prioritize AI-focused roles.

Microsoft and its peers are integrating AI-powered coding assistants and automation tools, which are streamlining developer tasks and prompting internal restructuring.

Despite the job cuts, Microsoft’s stock has risen 16% this year and 150% over the past five years, reflecting investor confidence in its long-term strategy.

These layoffs are among the company's largest since 2014, when it let go of nearly 18,000 employees.

The ongoing restructuring highlights both the opportunities and disruptions created by the tech industry’s aggressive pivot to AI, as companies adapt to remain competitive in a rapidly evolving landscape.