Business Insider reports that Microsoft plans to begin further layoffs, primarily targeting employees deemed to be underperforming. The tech giant has repeatedly acknowledged impending layoffs, but has declined to reveal the exact number of people affected.
According to the report, a Microsoft spokesperson confirmed the move and said the company remains committed to retaining top talent. “If an employee does not meet performance expectations, appropriate action will be taken,” the spokesperson added.
Impact on major sectors
According to the report, the reorganization will affect multiple departments, including the critical security function. Microsoft’s performance reviews span all levels of the organization, reportedly even affecting some senior level 80 staff.
Despite these cuts, Microsoft said roles left vacant by performance-based retirements are often replaced by new hires. The report added that the company’s global workforce (estimated at around 228,000 as of mid-2024) is likely to remain relatively stable.
Headcount cuts under Nadella’s leadership
The latest move is consistent with Microsoft’s history of restructuring its workforce under CEO Satya Nadella. Mr. Nadella has overseen multiple rounds of layoffs since taking office in 2014, starting with the most significant cut that year, when 18,000 employees, about 14% of the company’s workforce at the time, were laid off.
In recent years, strategic job cuts have affected multiple areas. Microsoft has laid off about 10,000 employees across its divisions, including Xbox, in 2023. After acquiring Activision Blizzard, the company retired nearly 2,000 game roles in early 2024.
Further job cuts continued in the summer of 2024, with approximately 1,000 employees in the Azure cloud services division being laid off. In September 2024, 650 Xbox division staffers were laid off and additional layoffs were made, bringing the total number of gaming-related layoffs that year to nearly 3,000.
Strategic focus during restructuring
This reorganization emphasizes Microsoft’s focus on optimizing employee performance and aligning resources with strategic goals. The company has historically prioritized innovation and growth, and these regular layoffs reflect its focus on maintaining operational efficiency.
