Microsoft is brewing another round of layoffs! "AI disrupts everything" sweeps through business operations, and the budget for computing infrastructure accelerates the replacement of human labor

According to reports from media citing informed sources, American tech giant Microsoft (MSFT.US) is preparing to implement a new round of layoffs, which could affect thousands of employees. The media reported that the tech giant is seeking to cut less than 2.5% of its global workforce; according to a team document submitted to the U.S. Securities and Exchange Commission (SEC) as of June 30, 2025, the company had approximately 228,000 full-time employees at that time.

Microsoft's layoff plan has been heavily disclosed by the media against the macro backdrop of the "AI disrupts everything" logic, which has begun to trigger a new round of corporate operational efficiency revolution, as well as the significant increase in AI computing infrastructure investments by tech giants like Oracle and Google to promote stronger AI computing resource revenue paths. This highlights that these tech giants are striving to free up larger amounts of cash to build AI computing infrastructure and embrace the grand narrative of cost reduction and efficiency improvement under the theme of "AI disrupts everything."

More specifically, Microsoft is compressing some important organizational structures that have long been redundant and complex, such as traditional software sales, IT consulting and IT outsourcing business delivery, and gaming consumption business, into a tight structure that serves the global AI data center construction process and the acceleration of Copilot AI application penetration around AI inference cloud computing infrastructure and high-efficiency operational machines related to AI applications.

Statistics from early June showed that the U.S. tech industry announced the largest layoff plan in nearly two years in May. Coupled with Oracle's recent announcement of laying off 21,000 employees over the past 12 months, it indicates that these tech companies focusing on cutting-edge technology trends are continuously increasing their massive expenditures/budgets associated with AI computing infrastructure. It also highlights that the record growth trajectory of cost reduction and efficiency improvement brought about by the super wave of AI agents triggered by Anthropic may come at the cost of large-scale layoffs.

Global tech companies, including Oracle, Microsoft, Amazon, and Google, are shifting their capital allocation focus from traditional human expansion to large-scale expansion of AI computing infrastructure to meet the explosive demand for cloud AI inference computing resources. Oracle, the database software and cloud computing giant, has explicitly acknowledged in regulatory filings that the deployment of AI technology has already led to and may continue to lead to a reduction in employees.

Goldman Sachs' latest calculations show that the global AI capital expenditure benchmark model is expected to grow from $765 billion annually in 2026 to $1.6 trillion annually by 2031, with cumulative capital expenditure expected to be around $7.6 trillion from 2026 to 2031. The power demand for data centers in the U.S. is expected to rise from 31 GW in 2025 to 66 GW in 2027. Morgan Stanley stated that the AI computing arms race has entered a system-level expansion phase, and the institution has significantly revised its capital expenditure expectations for large U.S. tech giants in 2026 from $433 billion a year ago to $805 billion, with capital expenditure in 2027 expected to reach $1.1 trillion, up from the previous forecast of $950 billion From Xbox to the Sales Consulting Team, Microsoft's New Round of Layoffs is Imminent! Tech Giants Entering the "Human Resource to Computing Power" Phase

According to insider information, the upcoming layoffs are expected to be announced as early as next week. Reports indicate that this restructuring layoff will cover multiple business units of Microsoft, particularly impacting the Xbox gaming division and sales and consulting-related positions.

Earlier in June, The Information reported that this major shareholder of OpenAI and leader in cloud computing, as well as Windows developer, was also considering structural options for its Xbox gaming division, including potential significant spin-offs or a complete reorganization into a wholly-owned subsidiary.

This latest layoff decision aligns with Microsoft's historical pattern of immediately restructuring its operational business units after the fiscal year ends on June 30.

Although a 2.5% reduction rate means thousands of positions, this round of layoffs is noticeably smaller than previous batches; in July 2025, the tech giant implemented one of the largest layoffs in recent years, cutting nearly 4% of its workforce, approximately 9,000 positions, which surprised global investors.

This move comes as Microsoft continues to balance operational costs across its core business units, reallocating some redundant and cumbersome resources from mature field teams and consumer business units to sustain its current massive capital investments in AI computing power infrastructure to meet the nearly endless demand for AI cloud inference computing power. This restructuring also reflects a broader trend of tightening spending among U.S. tech companies, where major business units are focusing on cutting teams of employees that can be replaced by AI agents for agent-based AI workflows to fund expensive AI computing infrastructure projects.

These strategic large-scale layoffs remain one of the dominant themes in the business operations of the entire tech industry this year. Meta (META.US), the parent company of Facebook, has already planned to cut 10% of its workforce, while e-commerce and cloud computing giant Amazon (AMZN.US) plans to cut approximately 16,000 positions globally. This trend is not limited to the tech industry; major leaders in traditional media and finance are also making similar adjustments to adapt to the efficiency of human resources and the overall labor productivity transformation trends in the AI era.

Microsoft's New Round of Layoffs Reveals New Capital Discipline Among Tech Giants: Inefficient Positions are Compressed, AI Infrastructure Becomes the Highest Priority for Capital Allocation

Following Oracle's significant reduction of 21,000 employees over the past 12 months, Microsoft plans to cut less than 2.5% of its global workforce, with affected departments including sales, consulting, and Xbox; meanwhile, U.S. tech, media, and even financial companies are simultaneously controlling costs while heavily investing resources into AI computing infrastructure or the deployment of AI applications.

Undoubtedly, the logic of "AI disrupts everything" has begun to ignite a new round of corporate operational efficiency revolution. For example, Block, led by Twitter co-founder Jack Dorsey, laid off over 4,000 employees in one go, nearly half of the tech company's total workforce. The company's public statement indicated that the agent-based AI tools of the AI agent model allow smaller teams to maintain higher operational efficiency; The CFO further stated that the significant improvement in operational efficiency brought about by the agent-based workflows focused on AI intelligent agents has made deep layoffs almost "inevitable" for any company.

The Microsoft executive team continues to focus on "organizational fat reduction" during the fiscal year transition: departments that are labor-intensive or have limited growth elasticity, such as Xbox, sales, and consulting, are being compressed, while Azure AI, Microsoft 365 Copilot, Foundry, AI large model hosting, cloud inference AI computing power leasing platforms, and enterprise AI workflow ecosystems are prioritized for capital. Microsoft CFO Amy Hood previously indicated that Microsoft expects a year-on-year decline in employee numbers over the next few quarters and emphasized the need to enhance operational speed, agility, and more compact accountability teams.

In other words, Microsoft is entering a new growth phase of "converting labor costs into computing power budgets." If the monetization growth path of AI accelerates, this will be seen by investors as a significant positive signal for improving capital efficiency.

This also illustrates that Microsoft's new round of layoffs is not a defensive measure against demand collapse but is highly related to the trend of "AI disrupting everything," and is a very typical capital reallocation path for companies in the AI era under this major trend: reducing the operating costs of low-efficiency mature businesses and labor-related enterprises under pressure of low growth or profit margins, while striving to transfer operational leverage to the high capital density of AI data center construction processes to meet exponential computing power demands, aiming to replace traditional human resource expansion with a higher capital intensity AI computing power stack budget—focusing increasingly on the core of the AI computing power chain, such as AI GPUs/AI ASICs, HBM, data center CPUs, data center optical interconnect systems, switches, liquid cooling, core power equipment, and AI cybersecurity platforms, which will continue to be the most critical "beneficiary chain of corporate budget migration" in the capital market.

The latest expectations from major Wall Street firms like Morgan Stanley and Goldman Sachs highlight that the supply chain bottleneck at the level of AI computing power infrastructure has expanded from "large-scale purchases of GPUs/ASICs" to "striving to simultaneously address the entire delivery process of AI data centers, including data center power equipment, liquid cooling, data center CPUs, DRAM/NAND/HBM, data center optical communication/optical interconnect, high-performance Ethernet network infrastructure, transformers, gas turbines, etc." Morgan Stanley predicts that by 2028, nearly $3 trillion in AI-related infrastructure investment will flow through the global economy, with over 80% of the spending still ahead