Microsoft layoffs 2025: Redmond plans more job cuts this year

Microsoft is reportedly planning for more layoffs in 2025 as a part of its performance management strategy.

Business Insider has exclusively revealed that Redmond’s next job cuts will affect various divisions, including its Security unit. As part of the initiative, the layoffs will target underperforming employees. The company, however, often replaces these roles that were cut due to underperformance to keep its workforce size steady.

“We are always working on helping people learn and grow. When people are not performing, we take the appropriate action,” Redmond’s spokesperson said, albeit refusing to pinpoint the number of jobs that are cut.

Microsoft had considerable job cuts throughout 2024, which mostly affected its gaming department in what was a challenging time for the tech industry.

In January, it cut 1,900 jobs in its gaming division following the Activision Blizzard acquisition, with Blizzard’s president stepping down. By May, it shut down several game studios under Bethesda, and in June, layoffs extended to its Azure cloud business. Most recently, in September, 650 more gaming division jobs were cut, adding to the earlier reductions.

But experts predict that the tech industry, at least in the US, will experience growth in 2025 after the rise of AI-driven hiring priorities.

Companies are moving from high-volume to quality-focused recruitment, with increased demand for AI and full-stack engineering skills. Hiring is becoming more global, with a rise in contractor roles as a cost-saving strategy.