Microsoft to Cut Up to 9,000 Jobs in 2025 Amid Massive AI Shift

In a significant restructuring move, Microsoft has confirmed plans to lay off up to 9,000 employees, marking its fourth major round of job cuts this year. This decision comes as the tech giant intensifies its investments in artificial intelligence (AI) and expands its global AI infrastructure, committing over $80 billion to build advanced data centers and support large-scale AI model training.

A Microsoft spokesperson told the BBC, “We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace.”

The 9,000 job cuts represent approximately 4% of Microsoft’s 228,000-strong global workforce, impacting multiple departments — though the company has not disclosed all affected divisions. Reports, however, suggest that its Xbox gaming division is among the hardest hit.


🎮 Gaming Studios Impacted: Projects Cancelled, Studios Shut Down

Internal emails, reported by The Verge and IGN, reveal that Microsoft has cancelled the reboot of the iconic game “Perfect Dark” and the anticipated title “Everwild.” The decision has led to the shutdown of The Initiative, the Microsoft-owned game studio behind the Perfect Dark revival.

Additionally, layoffs have spread to other well-known studios under Microsoft’s gaming umbrella:

  • Turn 10 Studios (developers of Forza Motorsport)
  • ZeniMax Online Studios (developers of Elder Scrolls Online)

Long-time ZeniMax executive Matt Firor, who served for over 18 years, announced he will step down in July.

“While I won’t be working on the game anymore, I will be cheering you on and adding to the thousands of hours I’ve already spent in-game,” Firor wrote on X.

In Ireland, Romero Games Ltd, co-founded by Doom creator John Romero, also announced layoffs after its game funding was pulled by its publisher.

“These people are the best I’ve ever worked with… our studio was also affected,” said Romero.


🧠 AI Investment Driving Job Cuts

Microsoft’s shift in focus is part of a broader industry trend where AI is reshaping corporate priorities, workforce structures, and long-term strategy. Since 2023, the company has made major moves in AI, including:

  • Hiring Mustafa Suleyman, co-founder of DeepMind, to lead the new Microsoft AI division.
  • Building AI-dedicated data centers and custom chips to support growing demand.
  • Partnering and investing heavily in OpenAI, the developers of ChatGPT, despite reports of recent tension in the relationship.

While Microsoft is investing heavily in its AI ecosystem — including Copilot, its in-house AI assistant — it has faced challenges in adoption. According to Bloomberg, many business users prefer ChatGPT, presenting a challenge to Microsoft’s AI go-to-market strategy.


💼 Redundancies Concentrated in Washington State

According to public employment data in Washington, over 800 layoffs are occurring in Redmond and Bellevue, Microsoft’s primary tech hubs in its home state.

This is Microsoft’s fourth wave of layoffs in 2025, following 6,000 job cuts in May alone. Analysts note that these continuous rounds of downsizing may reflect a long-term restructuring strategy to reallocate resources toward AI development, rather than temporary market correction.


🌐 Big Tech’s AI Arms Race

Microsoft’s restructuring comes as tech rivals aggressively pursue AI leadership:

  • Meta (Facebook) has reportedly offered AI engineers over $100 million signing bonuses, building a “superintelligence” division.
  • Amazon CEO Andy Jassy publicly stated that AI could replace many roles at Amazon.
  • OpenAI’s own talent has received competing offers from Meta, prompting warnings from CEO Sam Altman about an AI talent war.

The trend is clear: Big Tech is reshaping its workforce and operations to compete in a future dominated by artificial intelligence — even at the cost of legacy teams, products, and thousands of jobs.


🔗 Source:

Microsoft to cut up to 9,000 more jobs as it invests in AI – BBC News


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Engr. Abhishek Roshan

Engr. Abhishek Roshan

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