Microsoft cuts jobs again as AI costs climb, to let go of about 9,000 employees
This is the second round of layoffs in recent months. In May, the company also announced it would let go of 6,000 workers for the same reason.
According to Reuters , which cited Bloomberg's news report last month, the company was planning to cut thousands of jobs, mainly in its sales department.
The company had committed US$80 billion (S$101.72 billion) in capital spending for its 2025 financial year. However, the rising costs of scaling up its AI infrastructure have started to weigh on its profit margins, with its cloud margin for the June quarter expected to dip compared to the same period last year.
Microsoft said on Wednesday it plans to reduce the number of management layers, with fewer managers, and streamline its products, internal procedures, and roles across the company. The layoffs were first reported by The Seattle Times on Wednesday. See also Turkey scandal of Eric Adams, just tip of the iceberg?
On Wednesday evening, Microsoft told Channel News Asia (CNA) that it would continue implementing the organisational changes necessary to 'best position the company for success in a dynamic marketplace.'
Just this week, Business Insider reported, citing two sources familiar with the matter, that some teams in the company may add AI usage metrics to evaluate employee performance .
Developer Division president Julia Liuson reportedly told employees in an internal email that 'using AI is no longer optional' given that 'AI is now a fundamental part of how we work'.
India Today reported that while the company has heavily promoted Copilot, Microsoft's AI companion, adoption within the company's workforce has remained lower than expected. It also reported possible layoffs in the company's Xbox division as early as next week.
According to Reuters, which cited Bloomberg's report on Microsoft's gaming unit, the company's King division in Barcelona is cutting about 10% of its staff, or around 200 employees. This was confirmed by Microsoft, although no further details were provided.
Other major tech firms are making similar moves. In February, Meta announced it will cut off the company's ' low performers, ' about 5% of the company's workforce, to stay ahead in the AI race. The same goes for Google , under Alphabet, and Amazon, which have also cut jobs. /TISG
Read also: Microsoft to launch 3 new data centres in Malaysia by mid-year as part of US$2.2B investment
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
2 hours ago
- Straits Times
China's first Legoland opens to tourists in Shanghai
Sign up now: Get ST's newsletters delivered to your inbox The Chinese branch of the British-owned theme park franchise is the biggest Legoland in the world. SHANGHAI - Thousands of local tourists poured into China's first Legoland as it opened its gates in Shanghai on July 5, the latest theme park hoping to capitalise on a domestic tourism boom. The Chinese branch of the British-owned theme park franchise is the biggest Legoland in the world. It drew in early customers who flocked to attractions including a miniature train ride and a dragon-themed rollercoaster. 'I personally love to play with Lego blocks and we have many sets at home... so I wanted to come to Legoland at the earliest opportunity,' said Mr Shi, a 35-year-old resident of nearby city Hangzhou, who was visiting the park with his wife and child. Despite the Chinese economy's sluggish growth in recent years, domestic tourist spending grew 18.6 per cent in the first quarter of this year compared to the previous year, according to statistics. The theme park is hoping to capitalise on a domestic tourism boom. PHOTO: REUTERS 'Ever since the pandemic, I've made very few trips abroad,' said Mr Shi, adding that his family now travels to theme parks around China 'many times a year'. Eager Lego fans rushed into the park as soon as it opened, wearing themed shirts and waving branded flags as they enjoyed the 318,000 sq m compound in scorching temperatures. Top stories Swipe. Select. Stay informed. Singapore Asean needs 'bolder reforms' to attract investments in more fragmented global economy: PM Wong Singapore CPF members can make housing, retirement and health insurance plans with new digital platform Singapore CPF's central philosophy of self-reliance remains as pertinent as ever: SM Lee Asia Dalai Lama hopes to live beyond 130 years, much longer than predicted Sport Liverpool will move on after Jota's tragic death, but he will never be forgotten Singapore Tan Cheng Bock, Hazel Poa step down from PSP leadership; party launches 'renewal plan' Singapore Rock climbing fan suddenly could not jump, get up from squats Life Japanese food in Singapore under $20: 5 hawker stalls serving restaurant-quality sashimi and donburi Beijing has announced subsidies intended to make travelling within the country more affordable for Chinese citizens, and is pushing local governments to heavily market their attractions on social media. Companies have taken note of the wider local tourism boom and stepped up their plans in China. Eager Lego fans rushed into the park as soon as it opened. PHOTO: REUTERS A new Spider-Man attraction at Shanghai Disneyland broke ground in May, while Warner Brothers is set to open a Harry Potter experience in Shanghai by 2027. Toy giant Hasbro said this week its giant Peppa Pig park in the city was now 'in the phase of creative design'. Chinese collectable toy maker Pop Mart has also opened an attraction in Beijing featuring life-sized versions of its popular Labubu toys. 'The various provinces are putting a lot of effort into expanding their tourism industries, and all of them have special attractions,' said Mr Xu, a 34-year-old parent visiting Legoland on Saturday with his children. People wait for the gate to be opened on the grand opening day of Legoland Shanghai Resort on July 5. PHOTO: REUTERS But profitability remains a problem, especially for local companies with less brand recognition. As of late 2024, around 40 per cent of parks were still failing to turn a profit, according to state media reports. Yet analysts point to a growing population of retirees and job market changes as key factors pushing more locals to visit domestic attractions. 'The labour market is turning more flexible,' said Ernan Cui, China consumer analyst at Gavekal Research. 'More people have leisure time to travel around.' AFP
CNA
4 hours ago
- CNA
Foxconn reports record Q2 revenue, cautions about geopolitical and exchange rate risks
TAIPEI :Taiwan's Foxconn, the world's largest contract electronics maker, reported record second-quarter revenue on strong demand for artificial intelligence products but cautioned about geopolitical and exchange rate headwinds. Revenue for Apple's biggest iPhone assembler jumped 15.82 per cent year-on-year to T$1.797 trillion, Foxconn said in a statement on Saturday, beating the T$1.7896 trillion LSEG SmartEstimate, which gives greater weight to forecasts from analysts who are more consistently accurate. Robust AI demand led to strong revenue growth for its cloud and networking products division, said Foxconn, whose customers include AI chip firm Nvidia. Smart consumer electronics, which includes iPhones, posted 'flattish' year-on-year revenue growth affected by exchange rates, it said. June revenue roses 10.09 per cent on year to T$540.237 billion, a record high for that month. Foxconn said it anticipates growth in this quarter from the previous three months and from the same period last year but cautioned about potential risks to growth. "The impact of evolving global political and economic conditions and exchange rate changes will need continued close monitoring," it said without elaborating. U.S. President Donald Trump said he had signed letters to 12 countries outlining the various tariff levels they would face on goods they export to the United States, with the "take it or leave it" offers to be sent out on Monday. The Chinese city of Zhengzhou is home to the world's largest iPhone manufacturing facility, operated by Foxconn. The company, formally called Hon Hai Precision Industry, does not provide numerical forecasts. It will report full second quarter earnings on August 14. Foxconn's shares jumped 76 per cent last year, far outperforming the 28.5 per cent rise for the Taiwan market, but are down 12.5 per cent so far this year, reflecting broader pressure on tech stocks rattled by Trump's tumultuous trade policy. The stock closed down 1.83 per cent on Friday ahead of the revenue data release, compared with a 0.73 per cent drop for the benchmark index.
CNA
5 hours ago
- CNA
Trump says US will start talks with China on TikTok deal this week
United States President Donald Trump said on Friday (Jul 4) he will start talking to China on Monday or Tuesday about a possible TikTok deal. He said the US "pretty much" has a deal on the sale of the TikTok short-video app. "I think we're gonna start Monday or Tuesday ... talking to China, perhaps President Xi or one of his representatives, but we would pretty much have a deal," Trump told reporters on Air Force One. Trump said in a Fox News broadcast last week that he had found a buyer for TikTok, which he described as a group of "very wealthy people" whose identities he will reveal in about two weeks. A deal had been in the works this spring to spin off TikTok's US operations into a new US-based firm, majority-owned and operated by US investors, but it was put on hold after China indicated it would not approve it following Trump's announcements of steep tariffs on Chinese goods. Trump said the US will probably have to get a deal approved by China. When asked how confident he was that China would agree to a deal, he said, "I'm not confident, but I think so. President Xi and I have a great relationship, and I think it's good for them. I think the deal is good for China and it's good for us."
