Microsoft has laid off more than 7,000 employees, representing about 3% of its global workforce, in a move aimed at reinforcing its long-term strategy centered on artificial intelligence.
The company described the decision as a calculated effort to streamline operations and reallocate resources to its expanding AI initiatives, rather than a consequence of job displacement by AI technologies.
“This adjustment is a calculated step to optimize resources and ensure continued robust investment in Microsoft’s burgeoning AI platform,” the company said.
While job cuts in the tech sector often raise concerns about automation, Reuters reported that the layoffs were driven by financial restructuring to support new AI ventures—not by AI replacing human roles.
Microsoft has previously stated: “We have made huge investments in AI because we are optimistic about what it can do to help people, industry and society, and because we’re committed to bringing technology and people together to realize the promises of AI responsibly.”
Speaking at a recent event in Silicon Valley, Microsoft CEO Satya Nadella revealed that AI is already playing a significant role in the company’s development processes. “Maybe 20 to 30% of the code that is inside of our repos today, and some of our projects, are probably all written by software,” Nadella said.
He also described Microsoft as a “distillation factory,” focused on refining large, general-purpose AI models into smaller, task-specific tools.
The layoffs reflect Microsoft’s broader strategy to consolidate resources and accelerate its position in the rapidly evolving AI landscape.
