Quick overview

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Microsoft announced it would lay off roughly 9,000 workers. Less than 4% of its worldwide workforce, spanning teams, regions, and experience levels, will be affected by the change.

The announcement was made on the second day of Microsoft’s fiscal year 2026.

Typically, at the start of a new fiscal year, executives at the Redmond, Washington-based company announce reorganizations.

Microsoft stated in an email that it is “continuing to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace.”

This year, Microsoft has already conducted multiple rounds of layoffs.

It reduced headcount by less than 1% in January based on performance. Over 6,000 jobs were cut by the 50-year-old software company in May, and at least 300 more in June. As of June 2024, it had 228,000 employees. In 2024, it laid off 10,000 people.

Phil Spencer, CEO of Microsoft’s gaming division, sent a staff memo on Wednesday stating, “We will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness to position Gaming for enduring success and allow us to focus on strategic growth areas”

Microsoft reported nearly $26 billion in net income on $70 billion in revenue for the March quarter.

According to FactSet data, Microsoft remained one of the most profitable companies in the S&P 500, with numbers significantly higher than Wall Street’s consensus. Due to expected growth in Azure cloud services and corporate productivity software subscriptions, executives projected  14% revenue growth year-over-year in the June quarter.