Microsoft initiated yet another round of layoffs this week, impacting multiple organizations including gaming, sales, and marketing. Over 9,000 employees were cut, on top of the 6,000 that took place back in May. That means the Redmond giant has laid off over 15,000 employees in 2025 alone, and it's all to fund more AI infrastructure.
According to a report from The Seattle Times, Microsoft is moving to reduce headcount to free up more capital for AI spending. Specifically, the company is looking to invest more money in AI infrastructure and technologies, and is making various cuts across many organizations and divisions to fund these efforts.
"Microsoft’s push into AI doesn’t mean the company is replacing workers with the technology. Rather, the significant cost of building out the infrastructure over multiple years has Microsoft looking to trim costs where it can," The Seattle Times reports.
That said, a chunk of the roles Microsoft has laid off in recent months were roles that could be aided by AI technology. The company has invested heavily in AI technology that can debug and write code and is reportedly planning to make AI use mandatory with checks to ensure this conducted in performance reviews.
Microsoft has announced that it intends to spend $80 billion on AI infrastructure in the coming year to keep pace with the rest of the AI bubble. This is up $25 billion over the previous fiscal year. In recent weeks, reports have suggested that Microsoft and OpenAI's multibillion dollar partnership has become strained as both companies seek different things.
It should be clear to anyone following Microsoft closely that the company has become AI crazed in the last two years. Since 2023, Microsoft has rushed to implement AI technology in as many products and services as it can, regardless of whether that technology is ready for mainstream use.
The recent layoffs amassing over 15,000 people come as Microsoft signs off one of its best years ever financially. The company has soared ahead of Apple in market cap, and is trailing NVIDIA as most valuable company in the world. Investing heavily in AI infrastructure and products at the cost of everything else is proving popular amongst shareholders.
Microsoft Gaming CEO Phil Spencer told employees that despite layoffs, the Xbox "platform, hardware, and game roadmap [has] never looked stronger." Microsoft scrapped two in-development game projects as part of its most recent wave of layoffs, all to make room for more AI infrastructure it seems.
Ultimately, the recent layoffs have left a foul taste in a lot of people's mouths. And it's not just Microsoft, though it appears to have laid off a considerable amount in 2025 alone. Layoffs have hit everyone from Meta to Amazon, impacting over 50,000 jobs in tech across hundreds of companies, many of which are reporting record profits.
Unfortunately, this wave of layoffs doesn't look like it's going to stop anytime soon. Amazon CEO Andy Jassy has already hinted that the company expects to reduce headcount in the next few years as AI becomes more adopted internally. It's unlikely Amazon will be alone in this thinking.
What are your thoughts on the current health of Microsoft in the AI tech space and recent mass layoffs? Let us know in the comments.
