Key points
- Layoffs target management layers for greater efficiency
- Company reported $26 billion net income in March quarter
- June quarter revenue expected to grow 14pc year-on-year
ISLAMABAD: Microsoft announced on Wednesday that it will cut around 9,000 jobs, affecting less than four per cent of its global workforce across various teams, locations, and experience levels.
The announcement coincides with the second day of Microsoft’s 2026 fiscal year, a time when executives based in Redmond, Washington, traditionally reveal organisational changes, according to CNBC.
“We continue to implement necessary organisational adjustments to best position the company and teams for success in a dynamic market,” a Microsoft spokesperson said in an email.
This year, Microsoft has already conducted several rounds of layoffs. In January, it reduced staff by less than 1 per cent based on performance. The company then cut over 6,000 roles in May, followed by at least 300 more in June. As of June 2024, Microsoft employed 228,000 people. In 2023, it cut 10,000 jobs.
Largest workforce reduction
The largest workforce reduction in recent years was in 2014 when Microsoft eliminated 18,000 positions following its acquisition of Nokia’s devices and services division.
Similar to the May layoffs, Microsoft is aiming to reduce managerial layers that separate individual contributors from senior executives, reports CNBC.
“To ensure Gaming’s long-term success and focus on strategic growth areas, we will cease or scale back work in certain business sectors and align with Microsoft’s efforts to remove management layers to improve agility and efficiency,” wrote Phil Spencer, Microsoft’s CEO of gaming, in a memo to staff on Wednesday.
Microsoft’s net income
For the March quarter, Microsoft reported a net income of nearly $26 billion on $70 billion in revenue. These figures exceeded Wall Street’s expectations, maintaining Microsoft’s status as one of the most profitable companies in the S&P 500, according to FactSet data.
Executives forecast around 14 per cent year-on-year revenue growth for the June quarter, driven by expansion in Azure cloud services and corporate productivity software subscriptions.
Microsoft’s shares closed at a record high of $497.45 on 26 June but dipped 0.2 per cent on Wednesday, while the S&P 500 rose 0.5 per cent.
Other software firms such as Autodesk, Chegg, and CrowdStrike have also downsized in 2025. Meanwhile, payroll firm ADP reported that the US private sector lost 33,000 jobs in June, contrary to economists’ predictions of an increase of 100,000, according to Dow Jones polling.
