Microsoft layoffs 2025: The Windows-maker is reportedly planning to cut thousands of jobs in this department

Microsoft is reportedly planning to lay off more than 1,000 employees in July 2025, marking its third major workforce reduction this year, according to a Bloomberg report. The cuts are expected to coincide with the start of Microsoft’s new fiscal year and reflect a broader strategy to rebalance costs amid rising investment in artificial intelligence.

Sales and marketing teams will be affected
Unlike earlier rounds that primarily affected software engineers and product teams, this upcoming round is expected to hit the company’s sales and marketing division the hardest. Microsoft employs around 45,000 workers in sales-related roles, and many of them could be impacted. The shift comes after Microsoft began outsourcing software sales to third-party firms for small and mid-sized clients.

AI is to be blamed
Microsoft is reportedly committing $80 billion to build data centres in support of its AI ambitions this fiscal year. At the same time, executives are under pressure to reduce costs in other business areas, including headcount. CEO Satya Nadella previously described the restructuring as a “realignment”, emphasising that the layoffs are not based on performance but on the company’s evolving strategic needs.

Layoffs follow earlier job cuts in 2025
The upcoming July layoffs follow two previous rounds this year — a 6,000-person cut in May, and an additional 300 roles eliminated shortly afterwards. Microsoft has also made job cuts in its gaming division after completing the Activision Blizzard acquisition.