In a bold move signaling the changing priorities of the tech industry, Microsoft is reportedly preparing to lay off thousands of employees, primarily in its sales division, as it intensifies its focus on artificial intelligence. According to a report by Bloomberg News, the job cuts are expected to be announced early next month, following the conclusion of Microsoft’s fiscal year.
This upcoming round of layoffs follows a significant workforce reduction in May 2025, which impacted approximately 6,000 employees across the company. The new layoffs are part of a broader corporate restructuring strategy designed to free up resources for AI-driven development and infrastructure.
AI Over Jobs?
Microsoft has been investing aggressively in AI, seeking to maintain its lead as companies across the globe integrate machine learning, automation, and generative AI into their business models. The company has earmarked an eye-watering $80 billion in capital expenditure for this fiscal year, much of which will be allocated to expanding data centers. These expansions are critical to resolving capacity challenges as demand for AI services continues to surge.
While the job cuts are expected to hit sales teams the hardest, sources suggest that other departments may also be affected, and the final scope of the layoffs could still shift.
This trend isn’t unique to Microsoft. Just a day earlier, Amazon CEO Andy Jassy hinted at a similar trajectory, stating that the growing use of generative AI and autonomous agents would lead to a significant reduction in its corporate workforce over the coming years.
Strategic Restructuring or Collateral Damage?
As of June last year, Microsoft employed around 228,000 people globally. The planned layoffs highlight a growing tension in tech companies — the drive to innovate and lead in AI often comes with a human cost. While the company has yet to comment on the report, the looming announcement is expected to land with heavy consequences for thousands of employees.
Although the layoffs are a sign of strategic realignment, they also raise questions about the long-term human impact of AI adoption. As Microsoft continues to reshape its internal structure to fit the future of tech, employees and industry watchers alike are left to grapple with a new reality: in the age of AI, no role is truly safe.
