In the first quarter, Microsoft generated $25.8 billion in net profit and announced optimistic forecasts for the following quarters, despite the current difficulties and the threats posed by the Trump administration in many areas. And yet, the company will lay off staff: 6,000 positions will be eliminated, or 3% of the workforce. Microsoft employed 228,000 people at the end of June.
AI is eating into precious margins
"We continue to implement the organizational changes necessary to best position the company in a constantly evolving market," a spokesperson told CNBC without going into too much detail. We only know that these layoffs will mainly affect management in all of the group's divisions, worldwide. And the layoffs are not linked to any individual performance issues for the employees who will be affected.
This layoff plan will be the largest since the one in January 2023, which saw 10,000 departures. There were then 1,900 departures a year later at Microsoft Gaming, followed by 650 more in September 2024.
Microsoft, like other tech giants, is investing heavily in generative AI while cutting costs in other sectors. This is to preserve margins, which remain extremely comfortable: the margin for the Microsoft Cloud business reached 69% during the first quarter, compared to 72% (!) the previous year. Google also made drastic cuts last year to control spending and prioritize the development of artificial intelligence.
Source: CNBC
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