Microsoft Cuts 3% of Global Workforce as AI Reshapes Its Priorities

On May 13, 2025, Microsoft confirmed it had laid off 1,000 employees, which is about 3% of its global workforce. These cuts affected teams in mixed reality, Azure, and mission engineering, including several high-level roles. The layoffs reflect Microsoft’s ongoing shift toward AI and cloud services as it streamlines internal priorities.

Many of those affected worked on HoloLens and other enterprise-focused projects that have taken a backseat as Microsoft deepens its push into AI. Internal sources say some employees had spent over a decade at the company. Several reported abrupt access lockouts and a lack of direct communication from leadership.

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This round of layoffs follows earlier job cuts throughout Microsoft’s gaming division and hardware teams. The company has continued hiring in AI-related roles despite broader reductions, signaling a sharp internal pivot. Microsoft’s current AI focus centers on Copilot, its set of tools for enterprise and consumer use, and its deep partnership with OpenAI.

While the company did not issue a formal blog post or press release, managers delivered the news to affected employees directly. A spokesperson stated the company will continue investing in areas aligned with its long-term strategy. Microsoft closed its fiscal year with over 220,000 employees worldwide.