Microsoft Corp. is preparing for another round of layoffs, primarily targeting sales roles.

The announcement is expected early next month, following the end of the company’s fiscal year.

Sources noted the cuts may extend beyond sales teams, and the timeline could still change.

Microsoft has not publicly commented.

This follows a May layoff round that affected 6,000 employees, mostly in product and engineering. Sales and marketing roles were largely spared at that time.

In April, Microsoft also said it would rely more on third-party firms for software sales to small and medium-sized businesses.

As the company invests heavily in AI infrastructure like servers and data centers, executives have committed to limiting spending in other areas.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Microsoft’s layoff cycles follow strategic pivot patterns

Microsoft’s workforce reductions consistently coincide with major strategic shifts, showing a pattern of resource reallocation during transitions.

The company’s largest previous layoffs came in 2014 when it cut 18,000 jobs (14% of its workforce) following the Nokia acquisition, as it pivoted toward mobile and cloud computing 1.

Similarly, the current cuts come as Microsoft invests heavily in AI infrastructure, with planned capital expenditure of $80 billion this fiscal year primarily for expanding AI-capable data centers 2.

This pattern suggests Microsoft systematically restructures its workforce when realigning resources toward new strategic priorities, with these cuts representing the company’s adaptation to the AI era.

The company’s stock rose 3% following the 2014 layoff announcements, indicating that investors typically view these restructurings as necessary for long-term competitiveness rather than signs of financial trouble 1.

2️⃣ Tech industry shifting from growth-at-all-costs to efficiency model

Microsoft’s simultaneous job cuts and massive AI investments reflect a broader tech industry trend toward profitability over rapid expansion.

The tech sector has seen over 23,000 workers lose their jobs in April 2025 alone, with companies prioritizing efficiency while focusing investments on strategic technologies like AI 3.

These workforce reductions are happening despite strong financial performance. Microsoft reported quarterly profits of $25.8 billion while announcing cuts of approximately 3% of its global workforce 2.

Companies across the industry are cutting traditional roles in customer support, operations, and marketing while simultaneously hiring for AI-related positions, creating a bifurcated job market 3.

This represents a fundamental shift in how tech companies manage their workforces, moving from rapid expansion to strategic optimization as the industry matures and investor expectations evolve.

3️⃣ Customer-facing roles face accelerating disruption from AI

The targeting of sales teams in Microsoft’s latest cuts signals a shift in how customer relationships are managed in the AI era.

Microsoft reported in late 2024 that 37% of businesses have already replaced workers with AI technologies, with customer-facing roles particularly vulnerable to automation 4.

The company’s April announcement about using third-party firms to handle sales to small and mid-sized customers aligns with this broader automation trend, as AI increasingly handles routine customer interactions 5.

The targeting of sales teams specifically shows how quickly disruption is moving from technical roles to customer-facing positions, challenging traditional assumptions about which jobs are most vulnerable to technological displacement.

Recent Microsoft developments

……