Expanded job reductions at Microsoft catch employees off guard, with focus on management department decreases
In a significant move to streamline operations and enhance efficiency, Microsoft has announced a second round of layoffs in 2025, affecting approximately 9,100 employees, or around 4% of its global workforce. This follows an earlier round of cuts in May, which saw the departure of 6,000 employees.
The tech giant is focusing on reducing layers of management to increase agility and effectiveness, particularly by flattening management hierarchies and consolidating roles across various departments, including engineering, product development, and sales. The company is also undergoing strategic restructuring to better position itself for success in a dynamic marketplace, especially as it invests heavily in AI infrastructure, a priority that has significantly increased operational costs.
The recent layoffs, which have already started, are not limited to managers but also extend to employees deemed "underperforming" and individual contributor engineers. The affected employees have until July 8 to sign a separation agreement, after which they will receive 60 days of paid leave.
Microsoft's aim is to increase its "span of control" or the number of employees reporting to each manager. This move is in line with similar measures being taken by other big tech competitors, including Google and Meta, as they strive to flatten management levels and become leaner in the name of efficiency.
The company's gaming division, including the King division known for Candy Crush, is notably impacted, with about 10% of its workforce, approximately 200 jobs, being cut. Microsoft is reallocating resources toward artificial intelligence and automation, which requires a leaner workforce to remain competitive and efficient.
The layoffs are part of Microsoft's efforts to position itself and its teams for success in a dynamic market. The tech giant is not alone in this endeavour, as many other tech companies have also recently conducted layoffs. Google, for instance, has reduced the number of vice presidents and managers by ten percent. Amazon is working to increase the ratio of individual contributors to managers.
As Microsoft continues to navigate the ever-evolving tech landscape, these layoffs represent a strategic move towards a leaner, more efficient, and agile organisational structure, better equipped to meet the challenges and opportunities of the future.
[1] Microsoft announces second round of layoffs in 2025, affecting 9,100 employees, The Verge, [link] [2] Microsoft to cut around 9,100 jobs in second round of layoffs in 2025, CNBC, [link] [3] Microsoft to lay off 9,100 employees in second round of layoffs in 2025, TechCrunch, [link]
What changes is Microsoft implementing in response to the dynamic market? The tech giant is flattening management hierarchies, consolidating roles, and increasing the "span of control" through a strategic restructuring that includes the implementation of technology, such as AI infrastructure.
What is the aim of Microsoft's recent layoffs? The tech giant aims to create a leaner, more efficient, and agile organizational structure, better equipped to meet the challenges and opportunities of the future by reducing operational costs and becoming more competitive in the general-news technology sector.
