Microsoft (MS) will carry out its second major workforce reduction this year.
On the 2nd, according to foreign media such as Bloomberg and CNBC, an MS official stated the company's restructuring plans. Approximately 9,000 employees, nearly 4% of various teams and careers worldwide, will be laid off. The MS official noted, "We continue to implement the organizational changes necessary to position the company and teams optimally to succeed in a dynamic market."
In May, MS announced a large-scale layoff plan and laid off more than 6,000 people. At that time, MS suggested that the layoffs were intended to "reduce unnecessary management layers" and was pursuing plans to streamline its management structure. The MS official told CNBC that this layoff also reflected efforts to reduce the number of managers between frontline employees and top executives.
Bloomberg pointed out that in recent times, technology companies are restructuring their workforce to cut expenses while spending massive amounts on large language model (LLM) training and data center construction for artificial intelligence (AI) development. Microsoft, which has spent hundreds of billions of dollars on data centers and application development, has also promised investors appropriate expense management.
Anurag Rana, an analyst at Bloomberg Intelligence, explained that this workforce reduction could help offset the increased expenditures related to building AI infrastructure. He also analyzed that it might reflect a stronger intention within the company to utilize AI tools.
As of the end of June last year, MS had a total of 228,000 employees, of which 45,000 were in sales and marketing. MS has announced major restructuring and internal policy changes at the end of its fiscal year, which concludes in June each year.