Microsoft has confirmed another round of major job cuts, laying off approximately 9,000 employees in July 2025. The move, which affects nearly 4% of the company’s global workforce, is part of an ongoing restructuring strategy to streamline operations and double down on artificial intelligence (AI) and cloud technologies.

This is Microsoft’s second significant round of layoffs this year. In May 2025, the company cut around 6,000 positions, and earlier in the year, several hundred more jobs were eliminated. The total number of layoffs across 2025 now exceeds 15,000.

Widespread Impact Across Divisions

This latest restructuring spans multiple departments, including Xbox, global sales, and middle management. Approximately 830 employees were laid off at Microsoft’s Redmond, Washington headquarters alone. Notably, the gaming division has been heavily impacted. Teams at Rare, Turn 10 Studios, ZeniMax Online, and King (known for Candy Crush) have faced significant reductions. At least three major game projects—Perfect Dark, Everwild, and an unnamed MMORPG—have been canceled, and The Initiative, a studio under Xbox Game Studios, has been shut down entirely.

Why Now?

Microsoft says the layoffs are aimed at increasing agility and efficiency while reallocating resources toward areas with high growth potential. AI is at the center of this strategic pivot. Company executives emphasized that AI tools—such as coding assistants capable of writing up to 30% of a software engineer’s output—are reshaping the nature of work across departments.

Microsoft says the layoffs are aimed at increasing agility and efficiency while reallocating resources toward areas with high growth potential.

Despite job cuts, Microsoft plans to invest nearly $80 billion this fiscal year in AI infrastructure, cloud systems, and related innovations. The company claims that reducing layers of middle management and eliminating legacy roles is necessary to remain competitive in a rapidly evolving technology landscape.

Layoffs Beyond Microsoft: A Broader Industry Trend

Microsoft’s restructuring is not happening in isolation. Across the tech industry, more than 100,000 jobs have been eliminated in 2025 alone. Intel has significantly reduced its workforce, shutting down its automotive chip unit and laying off over 10,000 employees. IBM, Amazon, Meta, and Google have also continued or expanded their layoff plans.

Amazon previously cut 27,000 jobs and has indicated that AI-driven automation will influence further reductions. Google is offering early retirement buyouts, signaling potential future cuts. Meta has streamlined its teams in response to increased AI investment and shifting market dynamics.

The gaming industry has been hit particularly hard. Since 2022, over 35,000 positions have been eliminated globally in gaming, including cuts at Sony, Ubisoft, Riot Games, Unity, and EA.

India: Startups Feeling the Pressure

The Indian startup ecosystem has also felt the heat. Approximately 3,600 jobs were cut in the first five months of 2025 as companies adapted to tightening investor funding and revised growth strategies. Though smaller in scale compared to global tech giants, these layoffs reflect a cautious recalibration among India’s digital-first businesses.

The New Reality

For many professionals, especially those in tech, gaming, and digital services, the message is clear: AI is changing the rules. Companies are prioritizing roles that align with automation, cloud infrastructure, and machine learning, often at the expense of traditional positions.

Approximately 3,600 jobs were cut in the first five months of 2025 as companies adapted to tightening investor funding and revised growth strategies.

What does this mean for the next generation of students and professionals? Upskilling in AI-related disciplines, understanding data science fundamentals, and developing cross-functional agility are no longer optional. They’re essential.

This isn’t just a workforce correction. It’s a structural transformation. And it’s already underway.

We want to hear from you. How are you preparing for a future shaped by AI, and what roles do you think will emerge strongest? Share your thoughts with us.