Microsoft layoffs: Windows maker cuts more jobs amid AI investments

Microsoft has laid off 40 employees based in Washington state, adding to the wave of job cuts the company has carried out this year. The latest layoffs, disclosed in a state filing on Monday, come even as the tech giant reports strong financial results and continues to invest heavily in artificial intelligence.

Ongoing workforce reductions

These job cuts are separate from Microsoft’s previously announced global layoffs. In May 2025, the company said it would reduce its workforce by more than 6,000 employees, followed by another round of 9,000 layoffs in July. With the latest reduction, Microsoft has eliminated a total of 3,160 positions in Washington state alone so far this year.A spokesperson for Microsoft described the cuts as small and part of routine business adjustments. “Organizational and workforce changes are a necessary and regular part of managing our business,” the company said in a statement. Microsoft added that it will continue to focus on strategic growth areas that support its long-term goals.

AI spending and business performance

Despite the ongoing layoffs, Microsoft recently posted record quarterly revenue and profit, driven by strong performance in its cloud and AI divisions. The company said it has spent $88 billion in the past year to expand its AI infrastructure and plans to invest another $30 billion by the end of September 2025.

In a memo to employees last month, CEO Satya Nadella acknowledged the tension between job cuts and growth. He wrote, “Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding.”

Overall headcount remains steady

While Microsoft has cut jobs in several areas, it continues to hire in others. As of June 2025, the company’s global headcount stood at 228,000 — the same number reported last year.

The layoffs highlight the shifting workforce strategy at Microsoft as it balances operational changes with long-term investments in AI and cloud technologies.

Microsoft Job cuts in 2025

Microsoft's 2025 job cuts have impacted over 15,000 employees globally, with significant reductions in its gaming and sales divisions. The layoffs are part of a strategic shift to redirect resources and capital toward artificial intelligence, even as the company reports strong financial performance.