Microsoft Lays Off 6,000+ Employees to Prioritize AI Growth

Microsoft has announced layoffs affecting over 6,000 employees—about 3% of its global workforce. The move reflects a strategic shift as the company focuses more heavily on artificial intelligence (AI) development.

The layoffs are not due to AI automation replacing jobs, but rather a reallocation of resources to fund Microsoft’s AI initiatives. The company says this restructuring will allow for greater investment in AI tools integrated across platforms like Microsoft 365, Azure, and Dynamics 365.

CEO Satya Nadella recently shared that a significant portion of Microsoft’s code is already being written with AI assistance. His long-term vision includes developing specialized AI models that are smaller and task-specific, part of his broader goal to “democratize AI.”

Microsoft’s financials remain strong. The company reported $70.07 billion in quarterly revenue and its stock closed at $449.26, near its all-time high. Nadella has stated Microsoft plans to spend $80 billion on AI in 2025 alone.

Analysts suggest more layoffs could follow if Microsoft continues spending at this scale. Nearly 2,000 of the affected jobs are based in Washington state, where the company is headquartered.

The decision underscores how major tech companies are reshaping their workforce to prioritize emerging technologies like AI.