Redmond, WA – July 3, 2025 – Microsoft has announced a new round of layoffs that will affect about 9,000 employees worldwide. These cuts are the company's second major layoff this year. In May, Microsoft cut around 6,000 jobs, and smaller layoffs followed. Now, the total number of job losses at Microsoft in 2025 has crossed 15,000 .

In simple terms, Microsoft is removing roughly 4% of its global workforce of about 228,000 people. The company says the goal is to simplify its structure, reduce extra layers of management, and become more efficient and agile in a fast-changing market .

Who is Most Affected?

The layoffs cover many different areas inside Microsoft — such as sales divisions, engineering teams, and gaming studios, including Xbox. In the gaming division alone, Microsoft is cutting roles at well-known teams:

• King, the studio behind Candy Crush, is reducing staff by around 200 jobs ﹘ about 10% of its employees.

• Smaller game studios like Raven Software, ZeniMax, and others are also affected.

• Some game projects, including titles like Everwild and Perfect Dark, are being canceled.

Xbox CEO Phil Spencer said the goal is to “focus on strategic growth” and remove management layers so teams can move faster.

Why Is This Happening?

1. Big Investment in AI Infrastructure: Microsoft is spending heavily on artificial intelligence (AI) and cloud technologies. For fiscal year 2025 alone, the company is investing an estimated $80 billion to build data centers, support AI models, and improve cloud offerings. These investments are costly, and Microsoft needs to balance its budget.

2. Cost Cutting and Efficiency: Even though Microsoft reported a net income of around $26 billion on $70 billion in revenue last quarter, executives say the company must stay lean to remain competitive . The layoffs are part of a larger restructuring plan, including fewer management levels and a higher number of developers compared to managers .

3. Trends Across the Tech Industry: Microsoft is not alone. Many top technology companies—like Google, Amazon, Meta, and Intel—have also reduced staff this year to adapt to changing markets and rising costs.

What About Employees?

Microsoft has stated that affected employees will receive severance packages, including:

• 60 days of paid leave plus additional benefits

• Help finding new jobs, including interviews for other roles inside Microsoft.

However, losing a job can still be stressful. Especially in the gaming industry, layoffs often come with studio closures or halting game development projects, which can be hard for employees and fans who were looking forward to new games.

Broader Effects and Future Outlook

• For Microsoft: These layoffs make the company faster and more responsive. By focusing investment on AI, cloud, and core gaming, executives hope to stay ahead of competition. But they also need to ensure this does not hurt innovation or employee morale.

• For the Tech Workforce: The wave of layoffs across many tech giants shows that skills in AI, cloud services, and new technologies are becoming even more important. People who can adapt and learn these skills may have better job options .

• For Gamers and Industry: Canceling popular game projects and shrinking studios might slow down new game releases. But Microsoft has said it will continue to invest in flagship projects like Game Pass, cloud gaming, and major franchises.

Final Thoughts

Microsoft’s new round of 9,000 layoffs in July 2025 brings the total to more than 15,000 job cuts this year. These are major changes for a big company that is also spending billions to shape the future of AI and cloud. While the decision is strategic, the human and creative impacts, especially on game-making teams, are real.

As Microsoft moves forward, success will not only be about faster technology or leaner structure, but also about maintaining innovation, supporting employees, and keeping the trust of workers and customers in a challenging digital age.

With inputs from agencies

Image Source: Multiple agencies

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