This year's second round of layoffs, Microsoft cuts 4% of its employees, "Investing in AI, reducing manpower" sweeps through Silicon Valley
Microsoft has announced layoffs of approximately 9,000 employees, accounting for 4% of its total workforce, and it has reduced more than 7% of its global employees since the beginning of the year. Although not explicitly attributed to AI, the company's CEO previously revealed that one-third of the company's code has been written by software. Amazon's CEO also warned that white-collar workers face the risk of being replaced by AI, stating that current jobs require fewer people to perform
Behind the AI frenzy of tech giants, another wave of "reducing staff and increasing efficiency" is blowing!
Microsoft announced on Wednesday the start of its second round of large-scale layoffs this year, cutting about 9,000 employees, which accounts for 4% of its total workforce. According to the latest report from the Financial Times, this round of layoffs will affect various departments within the company. Since the beginning of this year, the tech giant headquartered in Redmond, Washington, has laid off more than 7% of its global workforce.
Microsoft previously cut about 6,000 positions in May and 2,000 positions in January, citing "performance-related" reasons. In addition to these large-scale layoffs, the company has also continued to conduct small-scale layoffs throughout the year.
Washington state regulatory filings show that software engineers accounted for 40% of the approximately 2,000 positions cut in May. Microsoft also laid off 10,000 employees in 2023 to cope with slowing revenue growth. As of June 30, 2024, Microsoft had a total of 228,000 employees.
Cost Control Under AI Investment Pressure
Although Microsoft has not explicitly attributed the latest layoffs to AI, CEO Satya Nadella previously stated that up to one-third of the company's code is now written by software. Microsoft has committed to investing $80 billion in data center infrastructure construction for the fiscal year ending June 30.
Microsoft stated: "We continue to implement necessary organizational changes to best position the company and teams for success in a dynamic market." Chief Financial Officer Amy Hood told investors in April that Microsoft is focused on "building high-performance teams and improving agility by reducing management layers."
Amazon CEO Andy Jassy warned white-collar employees in a memo last month that their jobs are under threat from AI. He stated: "We need fewer people to do some of the work that is being done today... We expect this to reduce our total corporate workforce."
Amazon has cut 27,000 positions in two rounds of layoffs in 2023, and its cloud computing division, Amazon Web Services, also laid off hundreds of positions in 2024. Despite facing layoff pressures, Microsoft reported better-than-expected performance in the three months ending March 31, with strong growth in its cloud computing division, and its stock has outperformed peers this year
