Microsoft (MS) is planning a large-scale layoff involving thousands of employees next month, Bloomberg News reported on the 18th (local time).
According to sources, MS is expected to announce the layoffs in early July. However, the timing may change. The layoffs will primarily affect the sales team, but other departments outside of sales may also be impacted.
MS previously informed employees in April that it planned to use third-party companies to sell more software to small and medium-sized business customers.
Earlier, in May, MS laid off 6,000 employees. This was the largest layoff since 2023, when the company cut 10,000 jobs, and now, just two months later, MS is initiating another round of layoffs. At that time, most of the layoffs were in product and engineering roles, while most customer-facing positions, such as sales and marketing, were largely unaffected. Regarding this, the company stated, "We are continuing to make the organizational changes necessary to succeed in a rapidly changing market environment," and announced that it would reduce its total workforce by 3%.
As of the end of June last year, MS had a total of 228,000 employees. Of these, 45,000 worked in sales and marketing.
Bloomberg News explained that this round of layoffs is a measure to reduce labor costs amid MS's large-scale investments in artificial intelligence (AI). MS invests tens of billions of dollars annually in AI infrastructure and related costs and has stated that capital expenditures will continue to increase in the new fiscal year starting next month.
Recently, as big tech companies have been conducting consecutive restructuring efforts, concerns are growing that the spread of AI will lead to job losses.
On the previous day, Andy Jassy, CEO of Amazon, the world's largest e-commerce company, said in an email to employees that "over the next few years, as we use AI extensively across the company to improve efficiency, we expect the total number of employees to decrease." Amazon has cut 27,000 jobs since 2022.
Dario Amodei, CEO of Anthropic, has warned that AI could eliminate half of all entry-level office jobs and that the unemployment rate could surge to 20% within the next five years.
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