Microsoft is laying off 3% of its workforce: Software engineers are the most hit

Microsoft has begun laying off approximately 6,000 employees, or 3% of its global workforce, in a sweeping round of cuts that spans all levels, teams, and regions. The layoffs, announced last week, mark the company's largest job reduction since 2023, when 10,000 roles were eliminated.

A Microsoft spokesperson described the move as part of "organizational changes necessary to best position the company for success in a dynamic marketplace." The company emphasized that these cuts are not performance-related.

Engineers are among the most affected

Software engineers appear to be disproportionately impacted. In Washington state alone, more than 1,985 employees tied to Microsoft’s Redmond headquarters were let go. According to Bloomberg, over 40% of those cuts were in engineering.

Notable departures include:

• Mike Droettboom, principal software engineering manager and CPython core developer, who confirmed the cancellation of Microsoft’s support for the Faster CPython project.

• Ron Buckton, a longtime TypeScript contributor, who shared that he was let go after 18 years at Microsoft.

• Matt Podwysock, a 19-year veteran who worked on the Azure SDK, also confirmed his departure.

In an ironic twist, many affected engineers were en route to PyCon’s Python Language Summit when they received their layoff notifications.

AI’s growing role and implications for job security

The cuts come just weeks after CEO Satya Nadella told investors that 30% of Microsoft’s internal code is now written by AI. Nadella had also hinted at ongoing “sales execution” changes, particularly in the wake of slower-than-expected Azure growth in areas unrelated to AI.

“At a time of platform shifts,” Nadella said, “you want to lean into new design wins, and not just keep doing the stuff you did in the previous generation.”

Despite the layoffs, Microsoft remains in strong financial health. The company reported $25.8 billion in quarterly net income in April, surpassing expectations, and its stock has surged to some of its highest levels on record, recently closing at $449.26.

Industry trend

Microsoft is following the broader tech trend of cutting costs and flattening management. The spokesperson confirmed part of the restructuring aims to eliminate "unnecessary layers," a strategy also echoed by Amazon earlier this year.

Cybersecurity firm CrowdStrike also announced a 5% reduction last week, and other major players have similarly cited AI transitions and organizational efficiency.