Microsoft to lay off 3% of global staff

Microsoft is laying off 3% of staff in a move that will impact all teams, levels and geographies.

A Microsoft spokesperson told CNBC that “necessary” changes will be made with the aim of better positioning the company in the marketplace, though did not specify whether the job cuts will include its games business. The company claimed the measures were part of an effort to reduce management layers.

Worldwide, Microsoft’s headcount totalled 228,000 as of June 2024, meaning a 3% cut will impact thousands of people – potentially verging on 7,000.

“Organisational changes”

“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said.

The announcement followed Microsoft’s recent financial results, which revealed a 13% year-over-year revenue rise for the company to $70.1 billion in Q3. Xbox content and services revenue was up 8%, meanwhile PC Game Pass revenue increased by more than 45% YoY.

Operating income was also up by 21%, indicating the layoffs to come won’t be a result of necessary cost-cutting measures to stay afloat.

Microsoft CEO Satya Nadella noted at the time that Microsoft will continue to “transform the business and focus on margin expansion”, specifically in reference to games.

Far from the first

The incoming layoffs are likely to make this Microsoft’s largest cutback in headcount since the Activision Blizzard acquisition, which swiftly saw 1,900 staff removed from Xbox, Zenimax and Activision Blizzard. The figure accounted for roughly 8% of Microsoft’s games division at the time.

This raised the ire of the Federal Trade Commission in 2024, with a challenge against the acquisition after the fact. Microsoft won the case just last week.