Microsoft Cuts Jobs: AI Drives Big Changes
Microsoft is undergoing a significant workforce reduction. The company is cutting 9,100 jobs. This represents about 4% of its total employees. This is Microsoft’s largest layoff in over two years. Earlier in 2025, Microsoft also eliminated more than 6,000 positions. In total, over 15,000 employees have lost their jobs this year.
Who is Affected?
The job cuts impact several areas. Microsoft’s Xbox gaming business is seeing significant reductions. The sales division also faces many layoffs. Other parts of the company are also affected.
Why Are They Cutting Jobs?
Microsoft is investing heavily in artificial intelligence (AI). They are spending around $80 billion on AI data centers in 2025 alone. The company believes AI tools will make them more efficient. This focus on AI means fewer human workers are needed for certain tasks.
The AI Effect on Jobs
Professor Jeffrey D. Shulman from the University of Washington weighed in on the situation. He explains that AI can now perform many entry-level jobs. AI can do these jobs as well as humans. Investors often react positively to AI-driven layoffs. They see these cuts as a sign of future growth. This creates an uncertain time for many employees.
Future Concerns
Professor Shulman raises an important question. If AI replaces entry-level workers, who will gain experience? How will future senior managers and leaders develop? AI will likely create new jobs. However, it’s unclear if these new roles will fully replace all jobs made obsolete by AI. This is a significant concern for the future of employment.
