Microsoft is reportedly planning to eliminate thousands of jobs, primarily impacting its sales division, as part of a restructuring effort to increase investments in artificial intelligence. The cuts are expected to be announced in early July, following the end of Microsoft's fiscal year. This follows a previous round of layoffs in May that affected 6,000 employees, mainly in product and engineering roles.
The company is shifting its focus towards AI, with plans to allocate approximately $80 billion this fiscal year to expand data centres and support AI services. This move aligns with other tech giants who are also balancing AI investments with operational efficiency. Microsoft had 228,000 employees as of June 2024, with 45,000 in sales and marketing. The company previously announced intentions to use third-party firms for some software sales to small and mid-sized customers.
CEO Satya Nadella has described the changes as a 'realignment' to position the company for future growth in the AI sector, rather than a reflection of employee performance. The timing of the announcement is consistent with Microsoft's pattern of making organisational changes near the end of its fiscal year.
