Microsoft has announced plans to lay off up to 9,000 employees, marking its latest round of job cuts this year. The tech giant confirmed that several divisions will be impacted, although it did not provide specific details. However, reports suggest that the company’s Xbox video gaming unit is expected to be among those affected.
The company, which is currently investing heavily in artificial intelligence (AI), has committed \$80 billion (£68.6 billion) to building large data centres to train AI models.
A spokesperson for Microsoft told the media, “We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace.”
The job cuts represent around 4% of Microsoft’s global workforce, which currently stands at 228,000 employees. This is the fourth round of layoffs the company has announced this year. In May, Microsoft revealed it would cut 6,000 jobs as part of its restructuring plans.
Official data from Washington state shows that over 800 of the affected jobs are based in Redmond and Bellevue, key hubs for Microsoft in its home state.
In recent years, Microsoft, like other major tech firms, has shifted its focus towards AI development. This includes investments in building data centres and producing chips to support AI growth.
Last year, Microsoft hired British AI pioneer Mustafa Suleyman to lead its newly-formed Microsoft AI division. The company believes AI will be central to its future, with a senior Microsoft executive recently telling the BBC that the next 50 years will “fundamentally be defined by artificial intelligence,” transforming how people work and communicate.
Microsoft is also a major investor in OpenAI, the creator of the popular chatbot ChatGPT. However, reports suggest that tensions have grown between the two companies in recent months.
Bloomberg reported that Microsoft has faced challenges in selling its AI assistant, known as Copilot, to business clients, as many office workers prefer using ChatGPT instead.
While Microsoft is cutting jobs, major tech firms in the US are actively competing to hire top AI talent. Meta, the parent company of Facebook and Instagram, has been recruiting experts from rival companies to build its own ‘superintelligence’ lab. Reports suggest that CEO Mark Zuckerberg has been personally involved in the hiring process.
Meanwhile, OpenAI chief Sam Altman recently shared that some of his team members have been offered signing bonuses exceeding \$100 million (£74.3 million) from Meta.
Amazon CEO Andy Jassy also commented last month that AI is likely to replace certain jobs within his company.
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