Microsoft fires 6,000 employees in its second biggest layoff round
What's the story
In a major development, Microsoft has announced a massive layoff round affecting around 6,000 employees.
The move marks a cut of nearly 3% across all levels and teams at the company.
The tech giant said that the layoffs are part of ongoing organizational changes to position the company for success in an ever-evolving marketplace.
Global impact
Layoffs span across various locations
As of June-end, Microsoft employed a global workforce of 228,000.
The latest layoffs will especially affect employees at the company's Redmond headquarters in Washington state.
Specifically, the headcount reduction will affect 1,985 individuals tied to this location and include 1,510 office-based roles.
This is Microsoft's largest round of layoffs since it eliminated 10,000 roles in early 2023.
Clarification
Layoffs not linked to performance
Unlike the previous layoffs in January, which were performance-based, these job cuts are unrelated to employee performance.
A Microsoft spokesperson clarified that one of the objectives behind this decision is to streamline management layers within the organization.
This strategy mirrors Amazon's recent decision to eliminate certain positions due to "unnecessary layers" within its organization.
Strategy shift
Microsoft CEO's comments on sales execution changes
In January, Microsoft CEO Satya Nadella hinted at possible changes in sales execution after Azure cloud revenue growth fell short of expectations without AI.
However, the company's AI cloud growth outperformed internal expectations.
Nadella stressed the need to tweak incentives and go-to-market strategies during platform shifts, calling for a focus on new design wins instead of sticking with previous generation strategies.