Layoffs: Microsoft Confirms Job Cuts Based On Performance Across Departments

These layoffs are expected to impact less than 1 per cent of the firm’s employees, the report said citing a person familiar with the matter.

Global headwinds and declining demand have pushed tech companies to figure out ways to cut costs and streamline operations.

Source : Microsoft

Tech major Mircrosoft is planning to slash a small percentage of jobs across departments on the basis of performance, CNBC reported last week citing a company spokesperson.

The company is looking to cut down its workforce by a small margin. “At Microsoft we focus on high-performance talent. We are always working on helping people learn and grow. When people are not performing, we take the appropriate action,” the company spokesperson said via email.

These layoffs are expected to impact less than 1 per cent of the firm’s employees, the report said citing a person familiar with the matter. As of June end, Microsoft operated a workforce of 228,000 employees. However, in comparison to peers, the firm’s downsizing efforts are on a much smaller scale.

Notably, Microsoft’s net income margin of around 38 per cent remained close to its peak since the early 2000s, while the company’s stock underperformed in comparison to competitors and climbed 12 per cent. Meanwhile, the Nasdaq jumped 29 per cent during the same period.

Earlier in 2023, the firm executed a layoff of 10,000 employees and let go of consolidated leases. In January 2024, about three months post completion of the Activision Blizzard acquisition worth $75.4 billion, the firm’s gaming entity slashed 1,900 jobs to cut down the overlap.

As 2025 starts, the company now faces a more difficult relationship with artificial intelligence start-up, OpenAI. Notably, Microsoft has supported OpenAI with more than $13 billion, and this partnership has helped push the company’s market capitalisation beyond $3 trillion last year.

Notably, the tech industry has been witnessing massive layoffs in 2024. Global headwinds and declining demand have pushed companies to figure out ways to cut costs and streamline operations. From Google to Amazon, all the big names in the industry have been feeling the impact of these challenges, posing a major risk to the job security for multiple professionals.