Microsoft Layoffs: 'We Were Asked To Stop Working..." Why World's Largest Tech Giant Firing 6,000 Employees?

Microsoft Layoffs: The world's largest technology company, Microsoft, is laying off 3% of its total workforce. As many as 6,000 employees are being fired. This was shocking when Microsoft's third quarterly results showed strong performance. All verticals recorded double-digit growth. Then why is Microsoft laying off its employees?

Microsoft Layoffs:

The tech company has announced job cuts of approximately 6,000 employees. This accounts for about 3% of its total global workforce.

Data from Microsoft's FACT Sheet revealed that worldwide they had 228,000 employees as of June 2024. Of the total, Microsoft's majority headcount is in the United States of America (USA) with 126,000 employees, while internationally, the company has 102,000 employees.

As per reports, Microsoft is cutting its workforce in its headquarters state, Washington. About 1,985 people where fired in Redmond, of which, 1,510 people were on-site employees.

The current layoffs are the highest since Microsoft's mass firing of 10,000 employees in 2023. However, this would be the second round of layoffs by Microsoft in 2025 so far, a small round of job cuts had taken place in January month as well.

Microsoft Employees' Stories After Laid Off:

An employee who was laid off, tweeted saying, "After 18 years at Microsoft, with roughly a decade of that time working on TypeScript, I have unfortunately been let go in the latest round of layoffs. I need to take a few days to process before I start looking for work. Thanks to everyone who's been part of my journey so far."

While Gabriela de Queiroz, the Director of AI at Microsoft said, "I was impacted by Microsoft's latest round of layoffs." Adding, she said, "Was I expecting it? Maybe."

"These days, no matter how hard you work, how much you advocate for your company, or how much results and visibility you bring-whether it's helping Microsoft become a trusted name among AI startups or driving initiatives to make it a better place to work for hundreds of people-none of that makes you immune to restructuring," she added.

Further, Queiroz said, "Am I sad? Absolutely. I'm heartbroken to see so many talented people I've had the honor of working with being let go. These are people who cared deeply, went above and beyond, and truly made a difference."

"We were asked to stop work immediately and set an out-of-office. But I chose to stay a little longer-showing up for meetings, saying goodbye, wrapping up what I could. That felt right to me," adding she said, "What's next? I don't know yet. It's too soon to say. But I trust that something good will come out of this."

Another employee was laid off while being on medical leave. Not just her, but even her husband was removed due to the mass tech layoffs. She revealed that in her seven years of experience at Microsoft, she was a high performer and had received a recipient of Gold Club for her performance.

Why Is Microsoft Laying Off Its Employees?

The reason is not related to employees' performance or any financial crisis. Microsoft is making money!

A Microsoft spokesperson said in a statement to CNBC, "We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace."

Also, Microsoft stated that making organizational changes is necessary to position the company for long-term success. Recently, CEO Satya Nadella also commented that about 20-30% of coding in some projects is already done by AI software.

Earlier on April 30, 2025, Satya Nadella, chairman and chief executive officer of Microsoft said, "Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth."

Microsoft Earnings:

It needs to be noted that on April 30th, Microsoft announced its third quarterly results. The company reported a 15% constant currency revenue growth to $70.1 billion while operating income surged by 19% to $32.0 billion in constant currency. Also, net income was $25.8 billion and increased 18% (up 19% in constant currency).

"We delivered a strong quarter with Microsoft Cloud revenue of $42.4 billion, up 20% (up 22% in constant currency) year-over-year driven by continued demand for our differentiated offerings," said Amy Hood, executive vice president and chief financial officer of Microsoft.

Nadella said, "From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers."

During the quarter, Microsoft 365 Commercial products and cloud services revenue increased 11% (up 14% in constant currency) driven by Microsoft 365 Commercial cloud revenue growth of 12% (up 15% in constant currency). Also, LinkedIn revenue increased 7% (up 8% in constant currency), while Dynamics products and cloud services revenue increased 11% (up 13% in constant currency) driven by Dynamics 365 revenue growth of 16% (up 18% in constant currency).

Windows OEM and Devices revenue increased 3%, whereas, Xbox content and services revenue increased 8% (up 9% in constant currency), and lastly search and news advertising revenue excluding traffic acquisition costs increased 21% (up 23% in constant currency).

Despite the strong performance, Microsoft is restructuring its workforce in all verticals including LinkedIn and Xbox.

Nadella on May 1 said that Azure is the infrastructure layer for AI, optimized across every layer: DCs, silicon, systems software, and models to lower costs and increase performance.

To this when a user asked Elon Musk's Grok on who could benefit from Nadela's insights on Microsoft's performance.

Here's what Grok said: Power Automate is a powerful tool for AI-driven automation, widely accessible via Microsoft 365's 345M+ subscribers, yet underutilized. Its AI Builder and Azure OpenAI integration enable tasks like invoice processing and cutting manual work by 80%. Microsoft could boost adoption by marketing these features to existing users and offering training. Many businesses may not realize they have access.

Microsoft Power Automate, which was earlier known as Microsoft Flow until November 2019, is a SaaS platform by Microsoft that is equipped with optimizing and automating workflows and business processes.

At present, Microsoft is the largest company and tech company in the world with market valuation of $3.338 trillion. It has been in a neck-to-neck rivalry with Apple to hold the top position. Apple's market capitalisation is about $3.180 trillion as of May 13, 2025.