Microsoft Continues Layoffs Amid AI Spending Boom: A Balancing Act in Tech

Microsoft cuts 42 more jobs in Redmond, continuing layoffs amid AI spending boom

Microsoft is laying off another 42 workers at its Redmond headquarters, according to a filing Monday, continuing a series of workforce reductions that have collectively impacted thousands of employees in recent months. The ongoing trickle of smaller layoffs marks a departure from the traditional corporate mantra of "cut once, cut deep" -- leaving some employees feeling nervous about whether their job will be next. We've contacted Microsoft for information about the types of jobs impacted by the latest cuts, among other details, and we'll update this post depending on the company's response. The notice brings the total number of Microsoft jobs cut in Washington state to more than 3,200 since May. It follows much larger rounds of 1,985 and 830 that took place in the state May and July, respectively. Globally, the company has laid off more than 15,000 people in the same period. The cuts come as Microsoft spends record amounts on AI. CEO Satya Nadella addressed this conflict in a July 24 memo, calling the layoffs "among the most difficult we have to make" while acknowledging the "uncertainty and seeming incongruence" of the situation. Despite the layoffs, the company is not shrinking. Microsoft's global headcount held steady at 228,000 in its 2025 fiscal year, ending in June, according to its 10-K filing. The company continues to hire in key areas like AI while making targeted cuts elsewhere. Across the tech sector, companies including Amazon, Google, and Meta have eliminated tens of thousands of jobs, citing pandemic-era over-hiring and a renewed focus on efficiency and strategic priorities like AI.

Microsoft layoffs continue into 5th consecutive month

Microsoft is laying off 42 Redmond-based employees, continuing a months-long effort by the company to trim its workforce amid an artificial intelligence spending boom. More than 15,000 Microsoft employees companywide have been laid off since May. With Monday's layoffs, disclosed in a state regulatory filing, the number of Washington-based workers affected has passed 3,200. The layoffs are separate from previous announcements, and the companywide impact was small, according to a Microsoft spokesperson. "Organizational and workforce changes are a necessary and regular part of managing our business," the spokesperson said in a statement, echoing previous comments given by the company. "We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners." The company is on a streak of layoffs right now, continuing one of the largest runs in its history. Since May, Microsoft has announced or confirmed layoffs each month. Some waves have been large, with more than 6,000 employees let go in May and an additional 9,000 cut in July. In the middle of Microsoft's waves of layoffs this summer the company reported record quarterly revenue and profits for the final three months of its 2025 fiscal year, which ended June 30. Wall Street cheered the results as Microsoft not only brought in $76.4 billion revenue with $27.2 billion in profit, but reported its Azure cloud computing division results for the first time. Microsoft said Azure surpassed $75 billion in revenue last year, showing a higher revenue growth rate than its biggest rival, Amazon Web Services, for the most recent quarter. During the first few waves of layoffs this year, Microsoft's enormous financial success was the unmentioned elephant in the room. CEO Satya Nadella addressed that in July, after more than 15,000 employees were let go, acknowledging the "uncertainty and seeming incongruence" between historical success and massive job cuts. Microsoft also isn't alone in laying off large swaths of its workforce. The company's cuts may be the biggest of the year among tech giants, but companies like Amazon, Salesforce and Oracle have all laid off workers this year. Amazon let go of an undisclosed number of cloud division employees in July and said, like Microsoft, that the layoffs were part of an effort to streamline the business. Austin, Texas-based cloud computing giant Oracle, which has an engineering hub in the Seattle area, laid off more than 260 Seattle-area employees this summer as part of companywide cuts. It hasn't announced any reason for workforce reductions. And last week, business software maker Salesforce disclosed that it had laid off more than 90 employees between offices in Seattle and Bellevue.