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Microsoft is preparing a new round of layoffs, expected to affect thousands of employees, with sales staff likely to bear the brunt.
The decision comes as the company continues to increase capital investment in artificial intelligence infrastructure.
People familiar with the matter said the layoffs are expected to be announced in early July, following the end of the company’s fiscal year. Although sales is expected to be the hardest-hit function, the cuts will not be limited to that area. Timing and final scope could still change, according to the sources.
Microsoft declined to comment.
Previous layoffs hit engineering, spared sales
The planned cuts follow a round of layoffs in May that eliminated 6,000 roles, primarily in product and engineering. Sales and marketing roles were largely unaffected at that time.
In April, Microsoft had also informed staff that it would begin shifting more sales responsibility for software aimed at small and mid-size businesses to third-party firms, reducing the need for direct in-house involvement.
The changes point to a broader shift in how the company handles customer engagement and resource allocation, especially as it reorganizes internal teams.
AI investment drives cost controls elsewhere
The software giant has said it regularly reassesses its organizational structure to align spending with growth priorities. As the company continues investing heavily in data centers and AI servers, executives have committed to limiting expenditure in other business areas.
With tens of billions of dollars allocated to AI expansion, internal communications and public statements have signaled the need to maintain operational discipline. Company leadership has assured Wall Street that its balancing act will support long-term profitability.
At the end of June 2024, Microsoft employed 228,000 people globally, including 45,000 in sales and marketing roles. The company traditionally announces reorganization and restructuring measures near the close of its fiscal year.
The upcoming job reductions are expected to reflect those broader strategic priorities, with AI infrastructure expansion taking precedence and operational roles coming under increasing scrutiny.
