Microsoft is currently the most valuable company in the world, but it’s still looking to streamline its operations as changes loom on the horizon.
Microsoft has said that it’s laying off 3 percent of its workforce. The company had 228,000 employees, which means that the layoff will impact nearly 7,000 employees. This is the company’s largest layoff since it had laid off 10,000 employees in 2023.
“We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement this morning. Unlike the earlier layoffs this year, which were performance-based, the latest reductions are broader in scope — affecting a mix of levels, geographies, and teams across the company, including LinkedIn. The company did not say whether efficiencies from AI are playing into the cuts, but did tell CNBC that one objective of the layoffs was to reduce layers of management.
The layoffs follow a series of internal policy shifts focused on employee performance. The company recently introduced stricter performance management protocols, including a two-year rehire ban for employees terminated due to poor performance. Under the updated framework, underperformers may be placed on a formal improvement plan or opt for a voluntary exit; failure to improve results in dismissal and ineligibility to reapply for roles within the company for two years.
More than 53,000 tech employees have been laid off at 126 companies so far this year, according to Layoffs.fyi. That compares to 152,922 tech employees laid off at 551 companies in all of 2024, and 264,220 at 1,193 companies in 2023.