Microsoft confirms major job cuts
'We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,' Microsoft said in a statement. It is the fourth round of layoffs at Microsoft this year following the cutting of 1 percent of its headcount in January, 6,000 further job cuts in May and 300 more in June.
In April, Microsoft said it planned to use third-party firms to handle more sales of software to small and mid-size customers. The company had a global headcount of 228,000 at the end of June 2024.
Microsoft has a market capitalization of over $3 trillion - the biggest in the world - but it is looking to rein in costs as it funnels billions into its ambitious bet on artificial intelligence. The news comes days after Amazon's CEO announced brutal workforce cuts as the company also increases its use of AI.
Amazon boss Andy Jassy said he plans to reduce the company's corporate workforce over the next few years as the tech will make certain roles redundant. Jassy told employees in a note seen by the Wall Street Journal that AI was a once-in-a-lifetime technological advancement and it has already transformed how Amazon operates.
'As we roll out more Generative AI and agents, it should change the way our work is done,' he wrote in the memo. It is not yet clear how many workers will lose their jobs and when the cuts will come. 'It's hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce,' Jassy explained.
Those close to the matter told the outlet that a large chunk of the decrease in headcount would hopefully occur via attrition. This means as employees move on their roles will not be filled. However, this will not cover all of the reductions and layoffs are still expected to occur at some point.
Amazon is the second largest employer in the country and is seen as a bellwether for employment stability. The company has already slowed hiring, suggesting AI is already influencing the company's staffing needs.
It is also clear the company is betting big on the new technology, after it revealed plans to splash $100 billion on data centers that AI depends on. It comes as Americans grow increasingly concerned about the impact of AI on the jobs market.
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